Friday, August 30, 2013

Hong Kong: Asian Divorce Capital

Jeremy D. Morley
Forbes calls London the Top Destination for International Divorces. What they mean, of course, is that it’s often the best place for someone divorcing a wealthy spouse to bring their case. It can be the worst destination for the wealthy spouse.
What Forbes doesn’t say is that the second-place in the Divorce Tourism list for someone married to a rich spouse may well be Hong Kong.  It seems to be the best in Asia.
Hong Kong follows English law when it comes to the money side of divorce. Its courts have expressly followed the famous cases which changed English law in favor of “fairness”. These cases do not simply divide the pot” equally. Most jurisdictions do that. They decide what will go into the pot in a way that can be massively more favorable to the weaker party, and they police the matter effectively by requiring full disclosure of assets and transactions and by making it painful for spouses who don’t “fess up” to all their assets.
But these simplistic league tables can be very misleading. You can’t simply ask your travel agent to book a flight into – or out of – one of these jurisdictions.
The key question is whether the courts have jurisdiction to handle the case. In these matters parties need strategic international divorce advice.

Thursday, August 22, 2013

Marital Property & Divorce in China: An Update

Jeremy D. Morley

Chapter Three of the Marriage Law of China, as amended in 2001, provides for spousal community property of post-marital wages, bonuses, income from production and business, income from intellectual property, property obtained from inheritance or gift and “other properties that shall be jointly owned.” (Art. 17). Article 18 specifies items that are excluded from community property, specifically a)  pre-marital property; b) payments relating to a spouse’s bodily injury; c) “articles of living specially used by either party”; and d) “other property that shall be used by either party.” The Marriage Law also expressly authorizes variation of such arrangements by prenuptial or postnuptial agreements. (Article 19).
The Supreme People’s Court of China has issued several “Judicial Interpretations” of the property provisions of the Marriage Law.

In 2001 the Court declared, in substance, that separate property should be not be transmuted into marital property in the absence of an express agreement.

In 2003 the Court declared, in substance, that in the absence of express proof of a contrary intention, funds provided before marriage to one spouse for the purchase of real property would be deemed separate property during the marriage, while similar funds provided during the marriage by the family of one spouse would be deemed to be a gift to both spouses and should therefore be treated as marital property.
In 2011 the Court changed (or clarified) its 2003 Judicial Interpretation by stating that if the parents of one spouse provided the funding during the marriage for the purchase of real property , the property would be the separate property of whichever spouse was named on the deed as the sole owner of the property. On the other hand, if the parents of both spouses provided such funding and if the title to the real property was placed in the name of only one spouse, the real property would be owned in proportion to the amount of funding supplied by the respective parents (absent a different agreement between the parties).
The 2011 Judicial Interpretation also declared that if one spouse enters into a contract before the marriage to buy real property, and makes a down payment from premarital funds subject to a mortgage, then if marital funds are subsequently used to pay the mortgage, the party under name title to the property is placed shall compensate the other party with regard to both the mortgage payments made during the marriage and the appreciation corresponding to such mortgage payments.

In addition the 2011 Interpretation provides that if one spouse sells real property that is the community property of both spouses, without the consent of the other spouse, to a bona third party purchaser who has paid a reasonable price, the other spouse will not be able to regain the property, and may only have the remedy of seeking compensation from the selling spouse upon divorce.

See Di, Yu, Latest Evolution of Marital Residence Regime in Contemporary China, 88 Chi.-Kent L. Rev. 1013 (2012-2013); Jason Tian, China Supreme Court issued the third judicial interpretation on application of Marriage Law,

Wednesday, August 21, 2013



Jeremy D. Morley

People with assets and international connections who are contemplating a divorce, as well as the spouses of such people, should first consult us for Strategic International Divorce Planning advice. Here is what we do for a motivated client (always working with local counsel as appropriate):
1. Analyze the Family’s Entire Economic Picture.

This is exactly what any divorce lawyer does in a conventional divorce situation but the strategic international lawyer will pay particular attention to any connections that the family has with other countries, to assets that are located overseas and to the possibility of moving assets or family to other jurisdictions.
2. Consult with the Client as to His or Her Goals.

Divorce lawyers can easily make a bad situation very much worse. They must be extremely sensitive to a client’s real needs and desires. For example, there is no point in advising a client to move his assets into an offshore trust if that will destroy a relationship with his soon-to-be ex or drive an inappropriate wedge between him and other members of his family. Is the client prepared to move lock, stock and barrel to a new country for a few years? Does he believe that his wife will join him there? How about the children?
3. Provide an Initial Analysis of the Law in Several Different Possibly Appropriate Jurisdictions.

The strategic international lawyer will prepare an initial analysis of the most obvious possible jurisdictions, including jurisdiction of the current residency, the other jurisdictions with which the client or his spouse have substantial connections and any other jurisdictions that the client is interested in, recognizing that if a particular jurisdiction is chosen the client may well need to move there for a substantial period of time and may also be well advised to take others in his family there, as well.
4. Focus on a few jurisdictions.

We will then usually consult with counsel in those jurisdictions that seem to hold the most promise.

We must analyze, separately for each “target jurisdiction”:
a) The jurisdictional rules. Will the courts in the target jurisdiction accept the anticipated divorce case, including all financial and child custody issues? What “facts on the ground” will need to be accomplished in order to satisfy the conditions?
b) The grounds for a divorce. What will the client need to prove in the target jurisdiction in order to be entitled to a divorce? What evidence must the client secure in order to do so?
c) The nature of the assets that are included in the target jurisdiction as property that is subject to being apportioned between the parties upon a divorce or that can be considered in making an economic apportionment between the spouses.
d) The method of asset division that is used by courts in the target jurisdiction.
e) The relevance of the conduct of the parties to the division of assets in the target jurisdiction.
f) The philosophy of the courts in the target jurisdiction.
g) Spousal maintenance. What are the rules concerning spousal maintenance (alimony). For what period of time might such payments be required? What is the likely amount of the award? Does the jurisdiction require a “clean break” whereby the spouse must receive a large lump-sum sufficient to generate the income needed to meet lifetime maintenance requirements?
h) Enforceability issues. Whether there are any specific factors which make it particularly easy or difficult to enforce an award in the target jurisdiction.
i) Particular issues. Each case raises specific matters that must be analyzed, depending on such matters as whether there are:
- Pre-marital assets. Some jurisdictions allow and even encourage the courts to divide even a party’s premarital assets (England). Others do not (New York).
- Trust assets. Jurisdictions vary considerably in their treatment of assets that a spouse has placed in trust. Some jurisdictions will “pierce” the trust (Colorado). Others will not (Japan).
- Inherited assets. Many jurisdictions do not divide assets that a spouse has received as an inheritance. Others do (Netherlands).
- Gifted assets. Many jurisdictions do not divide assets that a spouse has received as a gift.
- A pre-nuptial agreement. Some jurisdictions do not recognize international prenuptial agreements as binding. Jurisdictions vary significantly in the bases upon which prenuptial agreements may be invalidated or restricted, in the nature of the burden of proof concerning validity and on other critical factors concerning their applicability.
- “Bad conduct.” Some jurisdictions punish adultery, criminally and by a financial award to the “innocent spouse” (Korea). Others allow a divorce for mere incompatibility (California).
5. Analyze the rules concerning children.

Jurisdictions around the world vary enormously in their treatment of children upon a divorce.

Issues include:
- Sole custody versus joint custody.
- Minimal visitation rights to a noncustodial parent versus liberal visitation rights.
- Male-dominated approaches versus female.
- National biases versus impartiality.
- Religious biases versus impartiality.
- Freedom to relocate versus limited relocation.
- Freedom to take children overseas versus inability to do so.
An analysis of these matters must consider not only the rules on paper but the rules in practice. Enforcement issues may be critical.
6. Select the jurisdiction.

Having provided the client with the necessary information concerning each such jurisdiction, the client decides on a strategy.
7. Advise as to the steps now to be taken.

Our advice is frequently required to assist with the implementation of the strategy so as to:
(a) Maximize the likelihood that the jurisdiction in question will indeed be the jurisdiction that actually handles the matter.
(b) Minimize the likelihood that the other spouse will succeed in bringing the case in a less attractive forum or in moving the case from the better forum to a less attractive forum
(c) Maximize the likelihood that the jurisdiction in question will view the facts of the case in as favorable a light as possible.
Caveat: Attorneys in our firm are admitted to practice law only in the States of New York and New Jersey. Any information that we provide concerning the law of another jurisdiction is subject to a client obtaining legal advice from counsel in that jurisdiction. When appropriate we will retain the services of local counsel to assist us in providing advice to a client; the client will be responsible for the payment of the fees of all such local counsel.

Friday, August 16, 2013

Hong Kong Divorce: Jurisdiction and Inconvenience

Jeremy D. Morley  

The courts of Hong Kong deal with large numbers of international divorce cases. Hong Kong has jurisdiction if certain specified conditions are fulfilled but it is important to understand that the courts may decline jurisdiction on the grounds of inconvenience in some cases.

Jurisdictional Requirements:  

Hong Kong courts have jurisdiction of divorce cases if –

          a) Either of the parties to the marriage was domiciled in Hong Kong at the date of the petition or application; or

          b) Either of the parties to the marriage was habitually resident in Hong Kong throughout the period of 3 years immediately preceding the date of the petition or application; or

          c) Either of the parties to the marriage had a substantial connection with Hong Kong at the date of the petition or application.

The meaning of the term “domicile” is significantly affected by a Domicile Ordinance “to consolidate and reform the law for determining the domicile of individuals” enacted as of 1 March 2009, which amends the common law of domicile in certain respects. The Ordinance provides that:

          -every person has a domicile but not more than one;

          -on becoming an adult, an individual retains the domicile that he had immediately beforehand;

          -an adult acquires a new domicile in a country or territory if he is present there and intends to make    a home there for an indefinite period;

          -a child is domiciled in the country or territory with which he is for the time being more closely connected;

          -where the child's parents are domiciled in the same country or territory and the child has his home with either or both of them; it shall be presumed, unless the contrary is proved; that the child is most closely connected with that country or territory; and

          -where the child's parents are not domiciled in the same country or territory and the child has his home with one of them, but not with the other, it shall be presumed, unless the contrary is proved, that the child is more closely connected with the country or territory in which the parent with whom he has his home is domiciled. 

The meaning of the term “substantial connection” has been discussed in several international divorce cases. Cases have held that a party’s connection with Hong Kong must be “of sufficient significance or worth, to justify the courts of Hong Kong assuming jurisdiction in respect of matters going to, and consequential upon, the dissolution of that party’s marriage.” In this regard, a judge stated that:

“good sense dictates that there is a difference between residing in Hong Kong for a month or two to oversee a short-term project and being posted here together with one’s family for a period of several years.”    

Declining Jurisdiction in International Cases:  

Hong Kong courts may decline to accept jurisdiction by reason of the doctrine of forum non conveniens.

In order to warrant such an order the applicant must establish that there is another available forum that has competent jurisdiction and that is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all the parties and the ends of justice.

In order to answer this question, the applicant for the stay has to establish that:

          1.      That Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action); and

          2.      That there is another available forum which is clearly or distinctly more appropriate than Hong Kong. 

If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceeding has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer.  Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.

While the Hong Kong courts have granted applications to stay divorce cases in some international divorce cases the courts have often expressed pride in their experience in international matters and their ability to handle such matters. In one case the judge stated that:

“The family courts in Hong Kong have vast experiences in dealing with cases of an international dimension.  Many involved the large expatriate community in Hong Kong whose assets are located both in Hong Kong and overseas.  The Hong Kong courts regularly deal with the valuation of overseas properties and make orders thereto.  In terms of convenience and expense of hearing, Hong Kong has a purpose-built technology court room with video linkage to overseas countries.”

Jurisdiction to Make a Financial Award Even After a Foreign Divorce Has Been Obtained:

Pursuant to Part IIA of the Matrimonial Proceedings and Property Ordinance effective 2011, courts in Hong Kong may order financial relief to a former spouse whose marriage has been dissolved outside Hong Kong.  Before doing so, the court must consider the following matters:
a) the connection that the parties to the marriage have with Hong Kong;

b) the connection that those parties have with the place where the marriage was dissolved or annulled or where they were legally separated;

c) the connection that those parties have with any other place outside Hong Kong;

d) any financial benefit that the applicant or a child of the family has received, or likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or the operation of the law of a place outside Hong Kong;

e) if an order has been made by a contemporary authority outside Hong Kong requiring the other party to the marriage to make any payment or transfer any property to, or for the benefit of, the applicant or a child of the family-
     (i) the financial relief given by the order; and
     (ii) the extent to which the order has been complied with or is likely to be complied with;

f) any right that the applicant has, or has had, to apply for financial relief from the other party to the marriage under the law of any place outside Hong Kong and, if the applicant has not exercised that right, the reason for that;

g) the availabilty of any property in Hong Kong in respect of which an order for financial relief in favor of the applicant may be made;

h) the extent to which any order for financial relief is likely to be enforceable; and

i) the length of time that has elapsed sice the date of the divorce, annulment or legal separation.

Tuesday, August 13, 2013

IAML Essay Award for Young European Family Lawyers


Three years ago the European Chapter of the International Academy of Matrimonial Lawyers ("IAML") established an essay writing award for young family lawyers to be awarded on an annual basis. The first years were a great success. The Award aims to promote research and excellence among young family lawyers and to increase awareness among other legal professionals of the work and objectives of the IAML.

The annual Award consists of a prize of €1,000 to the author of the winning essay and € 500 for the two best runners up. The main Award will be presented at the Annual Meeting of the European Chapter to be held in Bordeaux, France, from March 19th to March 23rd 2014. The winning essay will be announced approximately two months prior to that meeting. The winning author will also receive a travel bursary of up to €2,000 to allow him/her to attend the meeting to include travel expenses.

A selection panel of the European Chapter will be responsible for the selection of the winning essay. The winning essay will be selected according to originality, the importance and complexity of the legal issues involved, the relevance of the subject matter to the IAML, any research undertaken and the structure, writing style and presentation.

Subject Matter
The essay will address a topic of relevance to the IAML and European family lawyers, typically with an international dimension and/or an analysis of recent or planned developments. This year's topic will be

“Should applicable law rules about Division of Assets in Europe be replaced with lex fori? Discuss in general or with reference to the law and practical experience in your country”.

The essay should be not less than 2,000 words and should not exceed 3,000 words in length (excluding footnotes), preferably in English, although essays written in a language other than English will also be welcomed.

The author of the essay must be a qualified practising family lawyer of up to ten years qualification and/or experience and be residing in a European country.

The winning essay will be published on the IAML website and also in the IAML Newsletter. The entry should not have been published or be under consideration for publication elsewhere, although can subsequently be published elsewhere with appropriate reference to the IAML. The invitation to apply will be published on the IAML website and all Fellows of the European Chapter will receive a notice to circulate details and highlight awareness of the Award in their respective jurisdictions.

Time Deadlines
The essays for consideration in respect of the award should be submitted no later than 15th November 2013. Submissions should be sent electronically to Donna Goddard of the IAML at

Friday, August 02, 2013

Hague Abduction Convention in Force between Trinidad and U.S.

Jeremy D. Morley

The Hague Abduction Convention has now entered into effect, as of August 1, 2013, between the U.S. and Trinidad & Tobago, three months after the U.S. declared its acceptance of T&T’s accession to the Convention. 

Trinidad & Tobago became a party to the Hague Convention in 2000 but only in May did the State Department declare its acceptance of the process in place in that country to implement the Convention.

The Trinidad Central Authority, for purposes of the operation of the Convention, is the Civil Child Abduction Authority in the Ministry of the Attorney General.