Introduction

According to the Census and Statistics Department in 2022, the number of divorces in Hong Kong has been on the rise for the past 3 decades. It is not surprising to see married couples leading separate lives without formally going through a divorce. Such couples may believe the other partner has no interest in their estate after they pass away as long as no provision is provided for the other partner in his/her will. However, this belief can result in unintended and disastrous consequences.

In the recent case LWH v YMY (executrix of the last will of YSK, Deceased) & Ors [2023] 2 HKC 217, the Court considered an application for financial provision made pursuant to the Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481) (the “Ordinance”) by the wife (“the Wife”) who was married to her late husband (‘the Deceased”) for 11 years but no provision in the will of the Deceased provided any interest for the Wife.

However, the Court found that that the Wife was entitled to financial provision from the Deceased’s estate in the form of a lump sum. The Court stressed that division of matrimonial assets is generally made on the basis of fairness and non-discrimination in accordance with the yardstick of equal division.

Importantly, the Court stressed that the Ordinance gives the Court discretionary powers to rewrite a particular will or alter the effect of intestacy rules to make reasonable provision for “the family circle” of a deceased.

Background

The Deceased was an indigenous villager of the New Territories and worked as a gardener. The only substantial asset of the Deceased was a three-storeyed village house (the “House”) built by himself prior to the marriage. After 11 years of marriage, the Wife moved out of the House with their daughter (the “Daughter”) in November 2012 and did not return.

When the Deceased was diagnosed with terminal cancer, knowing that his days were numbered, he made a will (the “Will”) which provided that block A of the House be given to his mother (the “Grandmother”) and the remaining block B of the House and his residuary estate be given to the Daughter. The Deceased did not leave anything for the Wife in his Will.

Discussion

The Law

Pursuant to section 3 of the Ordinance, an applicant may apply to the court for a wide variety of orders under section 4, such as lump sum, periodical payments, and sale of assets etc., on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant.

The “notional divorce” enquiry

At trial, there were arguments over the interplay between the “notional divorce” enquiry and the Wife’s claims.

The Court regarded that a marriage dissolved by divorce is different from a marriage dissolved by death. A marriage dissolved by divorce involves a conscious decision by one or both of the spouses to bring the marriage to an end, thus leaving two living former spouses each with resources, needs and responsibilities.

However, when the marriage is dissolved by death, a widow is entitled to say that she entered into it on the basis that it would be of indefinite duration and expected that she would devote the remainder of the parties’ joint lives to being his wife and caring for him. In such cases, the length of the marriage will be a less critical factor than it would be in a case of divorce.

The “notional divorce” enquiry is just a cross-check which should be treated neither as a floor nor a ceiling, otherwise it would fetter the Court’s discretion which is clearly intended to be conferred upon the Court under the Ordinance.

The separation

Whilst the Wife and the Deceased were living apart, were they regarded as separated as husband and wife? The Court regarded that this is a question of fact and law.

In this particular case, the Court found that in the final days of the Deceased when his health was fragile the Wife refused to return to live with the Deceased even upon the Grandmother’s request.

The Court found it hard to understand why the Wife refused to return to the Deceased if they still loved each other (as alleged by the Wife). The Court also found that the Deceased had specifically instructed his sister not to mention the Will to the Wife which reflected the way the Deceased perceived their marriage (or lack of it).

Up to the date when the Deceased passed away, the marriage would be one of 16 years. However on balancing various factors, the Court came to the view that the marriage ended when the Wife and the Daughter left the Deceased in November 2012.

The Court found that after the Wife left the Deceased in November 2012, they were no longer in a voluntary partnership in which there existed any mutual emotional, economic and general support. Therefore, the marriage was one of 11 years. The Court noted that cohabitation of a couple is generally essential. There may be exceptional cases where the absence of physical cohabitation does not stand in the way of treating a couple as married (e.g. because of the nature of their work). Separation requires recognition by the couple that their marriage has come to an end.

The considerations

In exercising the Court’s discretionary power, there is no limit to the matters to which the Court may have regard and there is no hierarchy among the matters to which the Court must have regard. Each of the matters may be of infinitely variable weight, depending on the particular facts of any given case. In deciding the outcome, the Court carefully considered the relevant matters under section 5 of the Ordinance, including: -

1.       the financial resources and financial needs of the Wife, the Grandmother, and the Daughter;

2.       the obligations and responsibilities which the deceased had towards the Wife, the Grandmother, and the Daughter;

3.       the size and nature of the net estate;

4.       the age of the Wife and the duration of the marriage;

5.       the contribution made by the Wife to the welfare of the Deceased, including contribution made by looking after the home or caring for the family; and

6.       other relevant circumstances such as the fact that the Grandmother had performed all household chores for the Deceased and took care of the Deceased on daily basis when he was terminally ill.

Equal distributions

The Court held that a marriage is essentially an equal partnership. In consequence, the division of the available property upon breakdown of the marriage must be conducted upon the basis of fairness and non-discrimination. The Court frowns upon any attempt to engage in costly “minute retrospective investigation”. The division of assets will usually be conducted on the basis of equal division unless there is good reason(s) for departure.

The Court noted that a marriage of about 11 years with a child would normally call for equal division of the assets. However in this particular case the illness and the inferior earning capacity of the Deceased were factors in favour of departure from equal division to the Deceased’s benefit. The Court also took into account that the Wife had not contributed to the maintenance of the House since the separation.

Adopting a broad brush approach, the Court held that the Wife should be given 45% of the matrimonial assets and the Deceased should be given the remaining 55%.

Accordingly, the Court ordered a lump sum of HK$5,645,500 (from the Deceased’s estate) to the Wife. The remaining sum will be divided between the Grandmother and the Daughter.

Takeaway

This case highlights that although a testator may have deliberately excluded their spouse from their will, this does not mean the spouse cannot claim against the testator’s estate. The surviving spouse may still be entitled to financial provisions paid out of the testator’s estate under the Ordinance.

 

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Important: The law and procedure on this subject are very specialised 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.

Published by ONC Lawyers © 2023