Deacons’ Family Practice is at the forefront of handling issues related to cross-boundary marriages. In light of the new Mainland Judgments in Matrimonial and Family Cases (Reciprocal Recognition and Enforcement) Ordinance (Cap.639), we have prepared a series of articles on Mainland/Hong Kong cross-boundary matrimonial matters including nuptial agreements, matrimonial property rights, the division of assets, dissipation of assets and third-party interests etc. In this series, we have invited Mainland lawyers to share their views on each topic.
This first article will explore the property rights of married couples in Hong Kong and the Mainland respectively.
“My husband and I were married in the Mainland and we own certain assets there and in Hong Kong. We are contemplating divorce and I want to know what my rights are in HK and the Mainland respectively.”
In Hong Kong, marriage itself does not change the ownership of assets, and one is free to use, sell and deal with his/her properties acquired before and during the marriage.
However in the event of divorce, all assets held by the parties – be it in their sole names, joint names or in the name of third parties – will need to be fully disclosed in the Financial Statement known as “Form E”. This includes all assets, whether held in Hong Kong or outside Hong Kong, and any significant change in one’s assets during the last 36 months.
The Court will then decide whether all or part of the assets disclosed will form part of the matrimonial pot, and make appropriate orders under the Matrimonial Proceedings and Property Ordinance (Cap.192) (“MPPO”) for:-
- Maintenance pending suit;
- Periodical payments;
- Secured periodical payments;
- Lump sum provision;
- Settlement or transfer of property/ property adjustment;
- Variation of settlement; and/or
- Sale of property.
Section 7 of the MPPO sets out the matters that the Court will have to consider when making the above orders, which includes the income and earning capacity of the parties, their respective financial needs and responsibilities, the standard of living enjoyed by the family, age of the parties and duration of the marriage etc.
In the landmark case of LKW v DD (2010) 13 HKCFAR 537, the Court of Final Appeal set out the approach on how to apply section 7 of the MPPO and affirmed the “equal sharing principle”. We will discuss this case in greater detail in the upcoming articles.
Regarding the position in the Mainland, our Mainland/Hong Kong dual-qualified lawyer Helen Liao has the following to say:-
“Unlike Hong Kong which follows a common law system, Mainland adopts a civil law system which is based on statutes. In particular, the Civil Code categories properties owned by a married couple into two types, namely (1) “community property” jointly owned by a couple as marital property and (2) “separate property” which is owned by a spouse.
Generally speaking, “community property” refers to the properties acquired by a couple during the marriage with their own or joint effort such as through work or investment. As to “separate property”, they are properties which a spouse acquired before marriage, as gifts or as inheritance. Whilst both parties have equal right to dispose of their community property, each party has the exclusive right to dispose of his/her own separate property.
Specifically, “community property” is defined under Article 1062 of the Civil Code to include the following received during the subsistence of the marriage:
| Salaries and wages as well as bonuses and other remuneration received from personal services rendered;Earnings from production, business operation and investment;Earnings arising from intellectual property rights;Properties acquired from inheritance or given as a gift (save and except property that belongs to only one spouse as provided in a will or gift contract); andOther properties that shall be jointly owned by them. |
On the other hand, “separate property” of a spouse refers to the following properties under Article 1063 of the Civil Code:
| Pre-marital property of one spouse;Compensation or indemnification received by one spouse for injury inflicted upon him;Property that belongs to only one spouse as provided in a will or gift contract;Private articles exclusively used by one spouse for daily life; andOther properties that shall be owned by one spouse. |
Unless a couple enters into a marital agreement to set out their own financial arrangements, otherwise the above regime will apply.”
It is therefore important for parties to a Mainland/Hong Kong cross-boundary marriage to consider the above matters when dealing with their assets.
In the next article, we will explore the topic of nuptial agreements which allow couples to determine their own financial arrangements during marriage and in matrimonial proceedings.
Our Family Law team at Deacons is experienced in handling matrimonial and family matters involving cross-boundary elements. Please reach out to us if you would like to know more.
For further information, please contact:
Sherlynn Chan, Partner, Deacons
sherlynn.chan@deacons.com
