Family Matters – Family and Divorce Newsletter November 2016

Welcome to the first edition of Family Matters, a newsletter from the Family and Divorce team at Gall.

We are delighted to introduce Lydia Pilati who joined us in October as a Registered Foreign Lawyer. Prior to joining Gall, Lydia worked for a specialist family law firm in London and has experience in a wide range of family law issues. We look forward to introducing Lydia to you over the coming months.

In other news, Head of Practice Caroline McNally has qualified as a collaborative lawyer. Collaborative practice is a voluntary dispute resolution process in which separating couples reach agreement without resorting to litigation. More information on this increasingly popular form of alternative dispute resolution is included in the article below about a civilised approach to divorce.

This year marks the 30th anniversary of the Hong Kong Family Law Association (HKFLA) of which Caroline McNally is the Honorary Secretary. In celebration of the anniversary, the HKFLA held a cocktail reception and a gala dinner with Baroness Hale of Richmond attending as Guest of Honour. Details of her visit to Hong Kong are included in the article below.


As part of the HKFLA’s 30th anniversary celebrations, Lady Hale attended a number of events in Hong Kong which culminated in a gala dinner held at The Hong Kong Club on 11th November 2016 at which she was the guest speaker.

Lady Hale is the UK’s most senior female judge and is currently Deputy President of The Supreme Court (formerly the House of Lords). Her career has been marked by a number of ‘firsts’, including that she was the first woman to sit in The Supreme Court and the first family lawyer to fill the post. Lady Hale will be one of the 11 Supreme Court Justices who will hear the Article 50 (‘Brexit’) appeal starting on 5 December 2016.

Lady Hale’s recent visit to Hong Kong was an occasion few family lawyers in the territory will forget. During her short visit Lady Hale gave a number of speeches including to The Faculty of Law, The University of Hong Kong on ‘Life in The Supreme Court’ and to the Hong Kong Judiciary and invited associations on ‘A Child’s Human Rights’.

Her final speech at the gala dinner held at The Hong Kong Club on Friday 11th November 2016 was a fascinating look at her dissenting judgments during her time in The Supreme Court.

Perhaps of most interest to family lawyers was the reminder that Lady Hale gave the only dissenting judgment in the case known as Radmacher v Granatino which changed the law on pre-nuptial agreements, and which the Hong Kong Court of Final Appeal has confirmed should be followed here.

In her dissenting judgment Lady Hale identified the questions to be addressed as (1) how far individual couples should be free to re-write the essential feature of the marital relationship as they choose, and (2) how far should this be determined by the Court or left to Parliament.

Her view was that the law on marital agreements was ripe for systematic review and reform. However, she considered the issue of pre-nuptial agreements to be a complicated subject about which people legitimately held different views. She commented that some may regard people who are about to marry as in all respects fully autonomous; others may wonder whether people who are typically (though not invariably) in love can be expected to make rational choices in the same way as business people can.

She stated that Perhaps above all, some may think it permissible to contract out of the guiding principles of equality and non-discrimination within marriage; others may think that it is a retrograde step likely only to benefit the strong at the expense of the weak”.

Lady Hale wrote a separate judgment because she believed that the question of pre-nuptial agreements had a gender dimension which some may think ill-suited to decision by a court consisting of eight men and one woman.

Against the majority decision of her fellow justices, Lady Hale concluded that the Court of Appeal had erred in giving decisive weight to the pre-nuptial agreement which she considered effectively led to the Court treating married parents the same as non-married parents. Her final remark was that Marriage still counts for something in the law of this country and long may it continue to do so.

To read her dissenting judgment in full, please follow this link to The Supreme Court website https://www.supremecourt.uk/cases/docs/uksc-2009-0031-judgment.pdf

Lady Hale was accompanied to Hong Kong by her husband Dr. Julian Farrand, previously a Professor of Law at Manchester University and the editor of Emmet and Farrand on Title, the principle textbook for UK conveyancing practitioners.

Given Lady Hale’s concluding remark in the Radmacher case (see our previous article) it is worthwhile considering the current law in respect of unmarried couples and parents.

Recent statistics published both in Hong Kong and the UK record that marriage rates are decreasing and unmarried cohabiting couple rates are steadily increasing. Figures recently published by the UK Office of National Statistics reveal that there are now 3.3 million cohabiting couple families in the UK, with the number more than doubling over the last twenty years. With this shift in modern societal norms, some argue that the law needs to catch up.

The term ‘common-law marriage’ is often used to describe a couple who are cohabiting, unmarried and have been together for several years. It implies people in such relationships hold similar legal rights to those who are married. However, this is a myth.

Cohabiting relationships do not have any legal recognition in the UK or in Hong Kong. This is despite almost half of the British public believing that cohabiting couples have legal rights in the event of separation. In short the law provides no safety net for couples who live together for many years, who have children together and who may have given up work to care for the family. The situation is different in jurisdictions such as Australia and New Zealand where couples in so-called ‘de facto’ relationships have very similar legal rights to married couples.

Hong Kong Law

Section 27 of the Marriage Ordinance sets out the conditions for a marriage to be legal in Hong Kong. It must be celebrated by the Registrar of Marriages, a competent minister in a place of worship or by a civil celebrant. Cohabiting couples have not complied with these requirements and their relationships have no legal status or protections.

Marriage v. cohabitation

Married couples who divorce are legally entitled to make claims on each other’s assets, including their property and their income. This is not the case when you are unmarried cohabitees. In order for unmarried cohabitees to claim a share in the property, a cohabitee will have to rely on 19th century trust and property law. The claiming party will have to try be able to show the parties’ intentions. The process will most likely be lengthy and expensive.

Without a Will in place, unmarried cohabitees have no automatic right to benefit from their partner’s estate in the event of their death. There are some protections available to cohabitees, but it requires steps to be taken by the parties rather than there being any existing legal right. Examples would be insuring your home is in joint names either through putting the tenancy in both names or purchasing a property in both names and having a trust deed showing each party’s interest.

Developing case law

There has been some development in England and Wales case law regarding unmarried cohabiting couples. In the case of GW v RW (Financial Provision – Department from Equality) [2003] 2 FLR 108 there was a change in approach in how to calculate the years of a marriage.

The prevailing view is that “where a relationship moves seamlessly from cohabitation to marriage without any major alteration in the way the couple live” the pre-marriage cohabitation is added to the length of the marriage. This means that if the cohabiting couple moves seamlessly to marriage then the duration of the marriage will include their cohabitation. The significance of this is that when courts are deciding the quantum of the financial provisions on divorce, one of the factors they take into account is duration of the marriage.

The case of GW v RW does go some way in recognising the legal relationship of cohabitating couples however it also causes some confusion. On the one hand the courts will include cohabitation in the duration of the marriage, making it undistinguishable from marriage, and on the other hand they will not recognise it as a form of marriage.

Conclusion

Discouraging the myth of common-law marriage will allow unmarried cohabiting couples to take certain steps to protect themselves. It is advisable that any unmarried cohabiting couple with no intention of marriage, should have measures in place that give them other protections if they were to separate or die, however unromantic it may seem. Until the law catches up with modern society, education is key so that people in vulnerable positions are aware of the risks associated with separation after cohabitation.

In March 2014 a healthy example for divorcing couples came in the surprise form of Gwyneth Paltrow and Chris Martin and their “Conscious Uncoupling” announcement which sparked huge media interest. Since then the news headlines have included more negative examples of celebrity divorces including salacious stories about Johnny Depp and Amber Heard, with Brad Pitt and Angelina Jolie set to follow with a custody battle over their six children.

Closer to home, earlier this month millions of people in mainland China tuned in to a live broadcast of the divorce hearing in Beijing Chaoyang People’s Court involving leading Chinese actor Wang Baoqiang and his wife Ma Rong. Wang launched proceedings in August accusing his wife of cheating on him. Ma, who denied the accusation of infidelity, filed a counter-claim asking for damages for the harm to her reputation.

But does it have to be this way? Divorce and separation are always traumatic, but by choosing the right process, approach and professionals it is possible to lessen the pain, for the parties and their family. It is not necessary to go to court and there are many options available such as solicitor negotiation, mediation and collaborative practice. These processes support the parties to work together to decide the arrangements for any children and how assets will be divided. These methods can be quick and cost effective and provide the parties with more control over the outcome.

Mediation

The aim of mediation is to help couples work things out together. It is not a form of relationship counselling, or a way to help a couple get back together. It is a voluntary, confidential and private process in which a neutral person, the mediator, helps the parties to reach their own negotiated settlement. The mediator has no power to impose a settlement. The function of the mediator is to find a way forward, overcome any impasse and help the parties reach an amicable settlement.

Parties can engage in mediation at any stage of the divorce process and it can take place in many formats. For example, it can involve only the parties and the mediator. It can also involve the parties’ respective solicitors. The mediator may have all parties sitting in the same room, or in separate rooms depending on the parties’ comfort levels and preferences. Many couples say that mediation helped them to resolve their issues on divorce while keeping levels of hostility to a minimum.

Collaborative Practice

Collaborative practice is a voluntary dispute resolution process in which parties work through and settle the issues arising out of the end of their relationship without resorting to litigation. The main features are the following:

  1. The parties will sign a collaborative participation agreement describing the nature and scope of the issues;
  2. The parties voluntarily disclose all relevant and material information;
  3. The parties agree to use good faith efforts in their negotiations to reach a mutually acceptable agreement;
  4. Each party must be represented by a specially trained lawyer whose representation must end if either party starts contested court proceedings;
  5. The parties may engage third party neutrals such as mental health professionals or financial advisors as required, but their engagement will also terminate if contested court proceedings are started.

 

Going to Court

For some people going through the court process will be the right option, because agreement cannot be found or there is a particularly difficult or unique aspect to the case. Many couples proceed through the early stages of litigation and the court process has been designed to assist parties reach an early agreement without unnecessary conflict.

In relation to financial matters parties are required to make full disclosure at the outset, in a standard format, and the court will closely manage the case to an early Financial Dispute Resolution hearing (“FDR”) where parties must use their best efforts, with the assistance of a judge, to reach agreement.

A similar system applies to children-related matters. The Children’s Dispute Resolution Scheme is mandatory in the Hong Kong Family Court. The aim of the scheme is to support mothers and fathers, so that they are able to effectively parent their children post separation or divorce. The intention is to ensure that whilst the best interests of children remains the court’s paramount concern, that lasting agreements concerning children are obtained quickly and in a less adversarial atmosphere. As with financial matters, the parents proceed quickly to a judge-led Children’s Dispute Resolution hearing (“CDR”) where settlement is strongly encouraged.

Most cases settle at the FDR or CDR stage, or shortly thereafter.

Contacts:

Caroline McNally, Partner
+852 3405 7629
carolinemcnally@gallhk.com

Lydia Pilati, Registered Foreign Lawyer
+852 3405 7677
lydiapilati@gallhk.com

Rachel Mocatta, Trainee Solicitor
+852 3405 7600
rachelmocatta@gallhk.com