Exploring Options
Hong Kong and China have been forging closer ties economically. Now, perhaps even domestically. According to the Census and Statistics Department, cross-border marriages are on the rise. Last year, the number of Hong Kong women marrying Mainland men hit a record high of 6785 people, an increase of 16% from 2011. The number of Hong Kong-registered marriages within that group stood at 4798, an increase of 16% from last year.

What happens, though, when all is said and done? Imagine the following scenario: a couple marry; they have assets in Hong Kong and the PRC. The husband has business in Hong Kong necessitating frequent short-term stays in Hong Kong. The wife resides in the PRC. The marriage goes awry and the couple heads for divorce. The question: where shall they divorce, in Hong Kong or the PRC? Both jurisdictions have different procedures. Exploring their differences from the start would save time and expense in the future.

A Brief Comparison
Pre-nuptial agreements are recognised in the PRC as a way of settling the parties’ assets during a divorce, but are not recognisable in Hong Kong. Division of assets is on an equal split basis (each party obtaining 50% of the total matrimonial assets), whereas Hong Kong uses the 50-50 split as a starting point which the Court is free to deviate from, depending on various factors such as each party’s income, financial needs, standard of living, age, physical or mental disability, contributions and the value accorded to that party through the marriage.

Entitlement to a Divorce in Hong Kong
According to section 3 of the Matrimonial Causes Ordinance (the “Ordinance”), Hong Kong Courts have jurisdiction in proceedings for divorce if either of the parties to the marriage was domiciled in Hong Kong, was habitually resident in Hong Kong throughout a period of 3 years before the date of the petition or application for divorce or had a substantial connection with Hong Kong at the date of the petition or application. “Substantial connection” has not been defined in the Ordinance, but factors such as having employment, assets or children who study here are likely to satisfy the requirement. The requirement is for either of the parties; therefore, in the scenario above, if the wife wishes to initiate proceedings in Hong Kong, she may do so even though she is not resident in Hong Kong. This is because she may rely on her husband being habitually resident in Hong Kong as a basis for divorcing here.

Too Late?

One Step Ahead in the PRC?
What if the wife in the above scenario finds that her husband has already initiated divorce proceedings in the PRC? Fortunately, the door is not shut for her altogether should she wish to “transfer” part of the divorce matters to Hong Kong. The divorce itself could take place in the PRC, but she may elect to settle ancillary relief matters in Hong Kong, such as the treatment of the couple’s Hong Kong assets. This is particularly useful where a substantial part of the couple’s assets may be found in Hong Kong. In addition, Hong Kong Courts require the parties to give full details during the process of all their assets, which leads to greater tracing transparency and allows one party, typically the one in a weaker position, to better grasp his/her spouse’s financial situation.

In the past, where one party has initiated proceedings in the PRC and the other, in Hong Kong, the divorce proceedings tended to have finished in the PRC whilst the Hong Kong one was still ongoing. The effect was that the Hong Kong Courts had to abide by the PRC judgment and could not apportion the couple’s assets anew. This position has now been amended with the introduction of a new Part IIA to the Matrimonial Proceedings and Property Ordinance. Should there be substantial grounds for an application for an order for financial relief, a party may apply to the Hong Kong Courts for leave to remedy the apportionment. This is so even if there is a pre-existing judgment of a Court of another jurisdiction. The Courts will ensure that certain conditions are satisfied before granting leave, including the condition that a party had a substantial connection in Hong Kong.

Signed a Pre-Nuptial Agreement?
Even if the parties have already signed a pre-nuptial agreement in the PRC which is likely to exclude one party from a share of the other’s assets, all is not lost. Should the disadvantaged party decide to initiate divorce proceedings or even settle ancillary relief matters here, Hong Kong Courts may not enforce the terms of the PRC pre-nuptial agreement.  As mentioned, the Court will look at all factors in the round to determine the appropriate apportionment of the marital assets.

A Viable Alternative

With the trend of increasing cross-border marriages, the question “Where shall we divorce?” is bound to gain importance in the future. A divorce in Hong Kong offers a more nuanced approach to divorce issues, from apportionment of assets, which takes into account many earning and expenditure factors of the parties in the marriage, to the enforceability of the terms of a pre-nuptial agreement. This flexibility of approach in handling a divorce case is still open to parties whose divorce proceedings have already been initiated in the PRC, as they may consider having ancillary relief matters settled in the Hong Kong Courts.

For enquiries, please contact our Litigation & Dispute Resolution Department:

E: family@onc.hk

W: www.onc.hk

T: (852) 2810 1212

F: (852) 2804 6311

IMPORTANT: The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.