WMH v LCY (Ancillary Relief) [2025] 1 HKLRD 1096, [2025] HKCA 92 (Timothy Lam)

Timothy Lam represented the respondent in WMH v LCY (Ancillary Relief) [2025] 1 HKLRD 1096, [2025] HKCA 92.

The respondent husband (H) sought leave to appeal from the Court of Appeal against an Order allowing the claim by the petitioner wife (W) for ancillary relief and ordering H to pay W a lump sum (the Lump Sum) of $4.72 million (the Leave Summons). In the Judgment below, which was handed down over 20 months after the date of trial, the Judge found that out of the four landed properties in question, three were matrimonial assets available for sharing. The Judge decided that there should be an equal division of the matrimonial pot; and the Lump Sum payable by H was made up of W’s half share of the matrimonial pot less the value of her total assets. The First Intended Ground of appeal contended that a fair distribution of the matrimonial pot should be at least 60% in H’s favour as the Judge: (i) failed to pay sufficient regard to H’s acceptance of sole responsibility to support the twin daughters of the family; and (ii) wrongly took into consideration certain “marital conduct” and “litigation conduct” of H. The Second Intended Ground argued a new point not raised at trial that a discount should be applied to the face value of the mandatory provident funds (the MPFs) held by the parties when computing the matrimonial pot. The Third Intended Ground was that the Judge erred in ordering H to pay W the Lump Sum without making an order for the sale of the landed properties. H argued that it was impossible for him to meet the payment obligation without selling any of those properties when the property market in Hong Kong had experienced a significant downturn after the trial and the market values of the three properties in the matrimonial pot had substantially decreased. In support of the Third Intended Ground, H also applied for leave to adduce evidence by way of a draft affirmation of the current/prevailing market situation and values of the three properties and the consequential implications of the Order on the parties’ financial positions, seeking to establish that the matrimonial pot would be substantially reduced (the New Evidence Summons).

Held, granting leave to H in respect of the New Evidence Summons and granting leave to appeal against the Order limited to the Third Intended Ground, that:

First Intended Ground

• (1) Financial provision applications in matrimonial proceedings were highly fact-specific. While the fact that one of the parties would be left with significantly more onerous obligations or responsibilities than the other was a relevant factor when considering whether there should be a departure from equal division, the weight to be given to such factor was a matter of discretion for the judge. Here, the Judge had plainly considered H’s role as the primary care-taker for the twin daughters. The Judge did not commit any error of principle, and his decision was one reasonably open to him in the exercise of his discretion (LKW v DD (2010) 13 HKCFAR 537 applied). (See paras.23-24.)
• (2) The conduct of parties was in principle a factor which may, alone or in combination with others, result in a departure from an equal division. Notwithstanding the Judge’s observations or views on H’s conduct, he did not in fact make any order departing from an equal division against H. There was also no basis to suggest that the Judge would have made an order departing from an equal division in favour of H but for his views on H’s conduct. The First Intended Ground was not reasonably arguable (LKW v DD (2010) 13 HKCFAR 537 applied). (See paras.31-32.)

Second Intended Ground

• (3) For the purpose of determining the value of the matrimonial pot, a discount might appropriately be applied to an asset which could not be immediately realised for cash or one that was not readily realisable or transferrable until much later. However, whether a discount should be given, and what discount rate should be applied, must depend on the circumstances, including the nature of the asset and the period of time that must or would likely elapse before the asset could be realised. Here, H had not given any basis for his proposed discount rates. Further, issues such as the possibility of early/delayed retirement, the circumstances where the MPFs might be withdrawn early, and the appropriate discount rate(s) were not investigated or argued at trial. (See para.36.)
• (4) In the circumstances, the Court was not satisfied that there was no reasonable possibility that the state of the relevant evidence on the issue of discount would have been materially more favourable to W had the point been taken by H at trial. W’s Flywin objection was well-founded. The Second Intended Ground was not reasonably arguable (Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356, [2002] 2 HKLRD 485 applied). (See para.37.)

New Evidence Summons/Third Intended Ground

• (5) Although procedurally an application for leave to adduce new evidence could not be entertained until after leave to appeal had been granted, an applicant for leave to appeal could support such application by reference to new evidence if he could demonstrate that it was reasonably arguable that the Court of Appeal would grant leave by reference to the criteria in Ladd v Marshall . In respect of an application for leave to adduce “matters which have occurred after the date of the trial or hearing” under O.59 r.10(2) of the Rules of the High Court (Cap.4A, Sub.Leg.), the strict Ladd v Marshall criteria were not applicable. Instead, the applicable principles could be found in EBS v NTCD as set out at para.43 of the present judgment (Man Lin Heung, the Administratrix of the Estate of Man Kwai Yin v 梁根林 [2019] HKCA 846, Cheung Wing Kuen Samuel v Ip Chui Sum [2022] 3 HKLRD 709, EBS v NTCD [2023] HKCA 425 applied; Ladd v Marshall [1954] 1 WLR 1489 considered). (See paras.42-43.)
• (6) Although generally, the value of the matrimonial pot in an application for ancillary relief should be assessed as at the date of the hearing, whether there was any scope for modification of this general rule and, if so, how it might be modified in the circumstances of this case was an issue which merited further consideration. The evidence now proposed to be adduced by H indicated that there had been further significant downward adjustment to the property values between the date of the joint letter where the parties agreed the adjusted market values of the four properties and the date of the Judgment, being some 20 months later. There were materials before the Judge at the trial indicating that that H would not, or might not, be able to pay the Lump Sum award without selling one or more of the four properties. There was a significant time gap and/or change in the value of the matrimonial pot between the date of the hearing and the date of the judgment. Whether H should reasonably have issued an application to adduce further evidence or make further submissions on the market values of the four properties after the conclusion of the hearing but before the handing down of the Judgment was debatable (LKW v DD (2010) 13 HKCFAR 537, Robson v Robson [2011] 1 FLR 751 considered). (See paras.44-45.)
• (7) Accordingly, the Third Intended Ground had a reasonable prospect of success and leave was granted to H to adduce the evidence in respect of that Ground under the New Evidence Summons. (See paras.47, 48.)

[The above is excerpted from the headnote to the report in HKLRD.]