4 Questions To Ask Your Divorce Solicitor

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4 Questions To Ask Your Divorce Solicitor

In a divorce, there are a million concerns that are swirling around in your head as you embark on this daunting and overwhelming process. One of the ways to ease your concerns is to be educated about the divorce process, and this requires you to ask the right questions before you begin this journey.

In your divorce journey, there are benefits to consulting with a solicitor to obtain the answers you need for your divorce. So what kinds of questions should you ask a solicitor before you get started?

1. What Costs Can I Anticipate? A divorce is a costly process. Even if you are a multi-millionaire with endless resources of cash, the costs associated with divorce should still be a concern. Your goal is to save your money and use it for you and your family going forward, and not necessarily on legal fees and unnecessary litigation. Each and every law firm will have its own legal fees and costs structure so you need to ask how that fee structure works so that you are aware of how your money will be spent and you can then plan to put aside necessary funds for the divorce process.

2. What Exposure Do I Have Related to Maintenance? One of the main issues you will want to discuss in an initial consultation is your exposure for maintenance for your spouse and/or your children. Whether you are the payor or payee spouse, you will want the solicitor to explain how maintenance is determined by the Family Court in Hong Kong and if possible, give you a general idea of what your exposure is based on the information you provide to the solicitor. It will be important to bring as much financial documentation/information with you to your initial consultation so the solicitor can review your family’s overall financial picture.

3. How Is Child Custody and Care and Access Determined? If you are concerned about child sharing, ask the solicitor what the Family Court will consider when making a determination related to child custody and care and access. It is also a good idea to be transparent with the solicitor on how childcare is currently shared between you and your spouse and what you envision or wish it to look like upon a divorce. Your solicitor can then set out a plan with you on how to achieve your goals with respect to child custody, care and access.

4. What Information Is Needed From Me? When you are consulting with a solicitor, you should be provided with helpful resources on how to get started, in addition to a list of information that you will need to gather to prepare for the process ahead. Initially you will be required to provide a lot of information regarding the children and financial disclosures in order to submit to the Family Court. These documents are mandatory in order to prepare for the process necessary to divorce.

What they say is true, “knowledge is power” and by asking the right questions, you will be educated and armed with information that is beneficial in helping you meet your goals and moving your case towards 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.

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 21st 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/

 

 

 

Spotlight Profile: Madeleine Booth, Barrister at Bernacchi Chambers

In this Spotlight Profile, we are talking to Madeleine Booth, Barrister at Bernacchi Chambers in Hong Kong.  Madeleine was recently named as one of the leading family and divorce law barristers in Hong Kong for 2021 by Doyles Guide.

Over the next year, we will touch base with Madeleine to discuss various hot topics in the area of matrimonial law and delve deeper into each subject and gain insight from her, as a barrister with expertise in the family law arena.

Madeleine, we spoke to you in September 2019 (pre-Covid) and you gave us a great rundown and overview of your work as a barrister in Hong Kong, pointing out the differences between a barrister and solicitor and the work that you do.  Can you tell us how you have been since pre-Covid days and whether you have seen any changes in the matrimonial sector since the Covid-19 pandemic? 

Since the last occasion, there’s certainly been a shift in the matrimonial sector as a consequence of the pandemic. To give just two key examples, there’s firstly been an unforeseeable, dramatic impact to various industries, which has had a knock-on effect on people’s income and perhaps even resulted in one or both spouses losing their job. Due to this, there’s been a marked increase in applications for variation of maintenance (monthly sums payable from one spouse to another, and/or for the benefit of the children of the family), as payments are no longer affordable or sustainable, either because of the loss of a job or a dramatic cut to an individual’s income.

Secondly, the situation caused by the pandemic has generally been a stressful, demanding time for families; both parents and children alike in many respects, and for a drawn out, extended period of time. Tensions and frustrations, exacerbated by limitations on travel and economic pressures, have led to fractures in marriages and co-parenting difficulties that have reportedly led to an increase in applications to the Family Court, whether it be for divorce, custody applications, relocation applications, or other relief. Unfortunately, the rise in cases coupled with the Family Court’s reduced operations for several months due to Covid-19 has resulted in an increase in delays for hearings. However, the judiciary is now working harder than ever to help clear the “backlog” caused.

What types of matrimonial disputes are you seeing more of with the changing social and economic climate in Hong Kong with the Covid-19 pandemic?  Do you anticipate any changes post-Covid?

As I alluded to earlier, there’s been an increase in variation of maintenance and interim maintenance applications, meaning requests by one spouse to (generally) reduce the amount of periodic payments made by them to the other spouse and/or paid for the benefit of the children of the family. This is usually due to a change in the applicant spouse’s earnings or sudden loss of work. Hand in hand with this is the rise in enforcement procedures as, when one party can no longer afford to pay, they begin defaulting on payments as they fall due. As a result, the other spouse may take out an application to enforce these arrears of payments, whether it be by an Order 45 Rule 6 application, judgment summons procedure, or seeking a prohibition order (which prevents a party from leaving Hong Kong until the sum owed is paid).

I would also say that there’s been a rise in relocation applications, where one spouse wishes to leave Hong Kong and relocate to another jurisdiction with the children of the family. Again, these cases are on the rise because of the global shift in socio-economic environments caused by the pandemic. A party may need to relocate because of the loss of work opportunities in Hong Kong and the better prospects of work in another country. If a party loses their job, Hong Kong may no longer be affordable and they may need to relocate back to their country of origin to seek familial support, or where costs of living are lower, or for education opportunities/better quality of life for their children.

It’s been predicted that Covid-19 is here to stay for the foreseeable future. It is uncertain at present what changes will occur once the pandemic is brought under control, but hopefully greater stability for families in Hong Kong.

We want to continue our discussions with you on several hot topics in the area of matrimonial law, which we will do over the course of this upcoming year.  To begin our series discussing hot topics in matrimonial law, let’s first tackle an area of great interest for those living in Hong Kong: marital agreements.

In Hong Kong, marital agreements are taken into consideration by the courts, but it’s not a guarantee that it will be followed.  Do you see that changing going forward, especially as other jurisdictions rely heavily on these types of agreements?

There have been no developments that would suggest that the interpretation of marital agreements in Hong Kong will change in the foreseeable future. Hong Kong often looks to other commonwealth jurisdictions, predominantly the United Kingdom, when considering evolutions in the law. The shift in Hong Kong’s approach to marital agreements followed the 2010 landmark decision of Radmacher v Granatino [2010] UKSC 42, in the UK (adopted in Hong Kong in the Court of Final Appeal decision SPH v SA (2014) 17 HKCFAR 364).

Currently, the approach to marital agreements in Hong Kong is that, whilst the Court is not obliged to give effect to nuptial agreements, they should give weight to them in circumstances where it is fair to do so. What will be considered “fair” depends on the facts of the particular case. In appropriate cases, the Court will hold the parties to their agreement and will not impose terms that it would otherwise have ordered were it not for the agreement. This is consonant with the current approach of the Courts in England.

Do Hong Kong courts take into consideration cross-jurisdiction agreements?  For example, what happens if an individual who is married overseas, moves to Hong Kong and subsequently gets divorced in Hong Kong and a marital agreement prepared and signed overseas is at the center of the dispute?

The same considerations would apply to a nuptial agreement whichever jurisdiction it is made in. The Hong Kong Family Court will consider whether it is fair to give the agreement weight in accordance with the principles set out in Radmacher, including but not limited to (1) whether the parties to the agreement were properly advised; (2) whether there was full financial disclosure prior to the signing of the agreement; (3) whether there was any duress exerted on one of the parties to sign the agreement; and (4) whether any unforeseen circumstances have arisen since the agreement that would render it unjust to hold the parties to it.

Have you ever had to argue before the Courts in Hong Kong regarding a marital agreement dispute?  In order to avoid future disputes with respect to marital agreements, what tips or advice can you give to those entering into these types of marital agreements? 

Yes, I have been involved in cases regarding marital agreement disputes. A nuptial agreement is generally more likely to be accorded weight if it can be shown to be both substantively and procedurally fair. Three foundational suggestions in respect of pre-nuptial agreements would be as follows:

  • Discuss the terms of the nuptial agreement well in advance of the marriage date (at least 28 days if not longer), which will assist in demonstrating that there was no duress or pressure on either party to sign the agreement in a hurry before the wedding date.
  • Both parties should receive independent legal advice (the parties cannot share one lawyer to advise them) on the agreement and should enter into it with full understanding and appreciation of its terms.
  • There should be sufficient disclosure to illustrate that the agreement was an informed decision.

It is very important to seek legal advice for a nuptial agreement from a qualified solicitor to ensure that its terms are substantively fair to both parties.

Thank you so much Madeleine for all your insight into this important topic.  We look forward to speaking to you again to discuss other key topics of interest!

About Madeleine: 

Madeleine’s practice encompasses both civil and criminal law, with a particular specialization in matrimonial work. Madeleine was recently named as one of the leading family and divorce law barristers in Hong Kong for 2021 by Doyles Guide.

In the Family Court, Madeleine has experience in contested financial and child related matters, and family related company and trust cases.

Having represented clients at Financial Dispute Resolution hearings, Children’s Dispute Resolution hearings, as well as at trial for preliminary issues (third party interests/property/companies), financial issues (MPS applications, ancillary relief trials) and child related matters (such as custody disputes, and applications under the Guardianship of Minors Ordinance), Madeleine’s experience is broad.

Madeleine is often called upon to make applications under s.17 of the MPPO, setting aside dispositions or applying for injunctions, on an urgent basis.

Madeleine also has experience in a number of other areas of legal practice, including civil litigation and criminal law. She has assisted senior counsel, and acted as sole legal counsel, in multiple hearings and trials at each level of court in Hong Kong, from its magistracies to the Court of Final Appeal. Madeleine appears in the High Court of Hong Kong regularly with respect to civil litigation matters, including trust related cases, injunctions, torts of harassment, intimidation, and unlawful means conspiracy, as well as summary judgment applications.

Madeleine’s experience extends beyond advocacy to include providing written opinions and legal advice, as well as assisting in mediations and arbitrations.

Relationship Generated Disadvantage

In this article, we will look at the principle which is referred to as “relationship generated disadvantage.”

So what is relationship generated disadvantage in divorce? In divorce, a spouse may request compensation for relationship generated disadvantage and it is most often applied when one party has given up a lucrative career to care for the children of the family. As seen in Miller v Miler; McFarlane v McFarlane [2006] UKHL 24, this concept recognizes that one party, usually a wife, may have seriously damaged his/her ability to earn money for the sake of the family.  This is even if the party’s future needs have been met generously.

It should be emphasized that this principle has only been seen in exceptional circumstances so before you believe you can receive such compensation upon divorce, it is important you read through this and most importantly, speak with your solicitor so he/she can advise you properly.

Now that we have clarified the meaning of a “relationship generated disadvantage” let’s talk about a recent UK ruling whereby Mr. Justice Moor stated that a couple who had been married for approximately 10 years and had two children together should split their assets but then added that the wife, a graduate lawyer from Cambridge University who had sacrificed her career to raise the parties’ children should be awarded an additional £400,000 as compensation.  It is important to note that this additional £400,000 award was on top of an equal split of the matrimonial pool of approximately £10,000,000.

In his ruling the Judge reasoned that there was a relationship generated disadvantage because the husband, also a lawyer, had enjoyed a “stellar” career and the husband’s career took precedence whilst the wife remained at home as the primary carer of the children.

According to reports from the UK, the couple met in September 1999 when the husband was an associate solicitor and the wife was a trainee.  After the wife qualified and made an associate in March 2001, the two individuals became a couple and shortly thereafter the husband became an equity partner at a law firm.  The wife worked as a solicitor and in 2006 was promoted to be a managing associate and later moved to a bank to become an in-house lawyer in 2007.  After the couple married in 2008, they moved into a large home valued over £5.8 million. Like many couples with children, the pair decided that she would take a step back from her career to raise the children whilst her husband continued to advance in his law career.

According to the reports, the wife returned to work in a part-time non-legal role after her 1st maternity leave but then was made redundant in December 2016 and has not worked since then.

In awarding the wife £400,000 in a relationship generated disadvantage compensation award, Judge Moor calculated this based upon the husband’s future working life of 4 more years at his firm (before an encouraged retirement after 20 years of practice) and that wife had earned approximately £100,000 a year both at the firm and the bank.

Following this ruling, the wife’s UK lawyer provided a comment to the UK press stating that they were delighted at the outcome for their client and emphasized that their client had sacrificed a potentially lucrative career to raise a family.

It is important to note the UK Judge’s statement in his ruling where he emphasized that “[I] accept that it is unusual to find significant relationship-generated disadvantage that may lead to a claim for compensation but I am clear that this is one such case.”  Thus, it is not the usual circumstance where a Family Court will find that a spouse shall receive such compensation.

When a Family Court looks to the distribution of finances, the Family Court will look at factors outlined in Cap 192 Matrimonial Proceedings and Property Ordinance section 7.  These factors include:

  1. Income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
  2. Financial needs obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
  3. Standard of living enjoyed by the family before the breakdown of the marriage
  4. Age of each party to the marriage and the duration of the marriage
  5. Any physical or mental disability of either of the parties to the marriage
  6. The contributions made by each of the parties to the welfare of the family including any contribution made by looking after the home or caring for the family

However, this most recent ruling by the UK courts may be something to discuss with your solicitor if you feel you have suffered a relationship generated disadvantage, as it may be an argument to present to the Family Court in your matter and it is apparent the Family Court may consider such compensation to you.

 

 

 

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