When parties separate they will need to address the future financial arrangements If the parties cannot come to an agreement themselves, they will need to make an application to the Family Courts in Hong Kong.
Senior Associate Chantelle Woo from Gall outlines 5 important things to know about financial arrangements in divorce proceedings.
1 – What does the term ‘ancillary relief’ mean?
The process of seeking the Family Court’s assistance in settling all financial aspects of a marriage following the issuance of a divorce petition is called ‘ancillary relief’. In other words, financial application is ‘ancillary’ to the divorce and treated separately to the dissolution of marriage and matters related to the children. Either the husband or the wife can apply for ancillary relief.
2 – What financial orders does the Family Court have the power to make?
The Family Court can make various interim and final financial orders. The most common orders are for maintenance, for the payment of a lump sum, for the sale of property and for the transfer of property.
3 – Does the application for financial relief need to be made as part of a divorce?
Yes, at present, it is not possible to make a standalone application for ancillary relief.
The application for ancillary relief is usually applied for by the Petitioner (i.e. referred to as the person who initiates the divorce proceedings). If the Respondent (i.e. referred to as the other party) to the proceedings wishes to apply for ancillary relief, s/he can file a document, called a Form 25, to indicate the financial orders s/he would like to claim.
4 – How are legal costs dealt with?
Generally speaking, the party who succeeds in an ancillary relief application at trial will be able to recover part of his/her costs from the other party, but the Courts have the ultimate discretion in making decisions on costs.
That said, in most cases the parties are able to reach a settlement on their ancillary relief claims with the assistance of the Court, mediator or solicitors and the parties will each bear his/her respective legal costs involved in their ancillary relief applications.
5 – How long do ancillary relief proceedings usually take?
With a view to assist the parties in reaching a financial settlement and avoiding an ancillary relief trial, the Family Court will usually direct that the parties take part in the Financial Dispute Resolution (“FDR”) which is designed to allow them to negotiate their financial settlement without the need for an ancillary relief trial (which is likely to be a costly and time-consuming process). It will usually take around 9 months to get to the FDR. If the parties cannot reach an agreement and proceed to trial, the process could take around 2 years or more.
Given the time and costs involved in this process, parties are often encouraged by their solicitors and the Courts to settle amicably through alternative means of dispute resolution in lieu of a full-blown ancillary relief trial.
For further information, please contact:
Caroline McNally, Partner, Gall
carolinemcnally@gallhk.com
