Disclosure of Assets in Hong Kong Matrimonial Litigation: Introduction
In Hong Kong matrimonial litigation, assets disclosure operates mainly through filing of assets disclosure form (Form E) into the Court by both parties. Both parties have obligation to honestly and accurately disclose their financial status and documents such as their own property, incomes, assets and liabilities. Assets disclosure documents (Form E) must be signed under oath. Under the Hong Kong legal system, any person knowingly make false statement on documents under oath may commit criminal contempt of court.
After both parties exchange their property disclosure documents (Form E), each party has right to raise reasonable questions in relation to the contents of the other side’s property disclosure document by way of Questionnaire and
requests the other side to provide further explanation, descriptions or relevant documentary evidence. If the parties have disputes on whether there is need to disclose a particular document or its content, then it is up to the Court
to decide and make an Order accordingly. When the Court considers whether to order a party to disclose something in particular, it usually takes into account:-
- Relevance, i.e. whether the requested document to be disclosed is relevant to the other party’s financial status;
- Possession, i.e., the requested party possesses or can reasonably acquire the documents requested;
- Reasonableness, e.g. if it is a very small amount of expenses (such as $1,000.00) and the requested party has already made reasonable explanation as to the purpose of the expenses, then the Court may not support the other party’s request to provide evidence as to the expenses.
In short, in Hong Kong divorce litigation, the parties have the obligation of full and frank disclosure of their own assets, each party of the right to question the other party’s disclosure by way of questionnaire and the Court has the power to make an disclosure order. These make up of the assets disclosure system in Hong Kong matrimonial proceedings.
Legal Consequence for Non-Disclosure
As mentioned, assets disclosure documents need to be signed under oath, knowingly making a false statement may constitute criminal contempt of court. However, the burden of proof for this criminal offence is very high and it rarely happens. The Court is more willing to make a costs order against the party who refuses to disclose his own property sufficiently (i.e. requests the party who unreasonably refuses or does not disclose his property on time to bear the costs incurred by the disclosure procedures) and draw negative inference against that party in relation to the assets that the party refuses to disclose.
In the Hong Kong divorce case LKF v LCYY [2012] HKFLR 398, both the husband and wife did not make full and frank disclosure about their properties, the Court drew negative inference based on the particulars of the case and presume the assets that the husband did not disclose worth $2,500,000.00 and the assets that the wife did not disclose worth $4,500,000.00, and then divide properties based on the presumptions.
Cannot use illegal Means to Investigate the other Party’s Assets
In some matrimonial proceedings, a party wishing to obtain hints or information about the other side’s assets may risk the use of illegal means to investigate and acquire the other side’s financial information. Evidence obtained by such means is likely to be ruled inadmissible by the Court.
The UK case Imerman v Tchenguiz [2011] 1 ALL ER 555 confirmed the above principle. Although couples usually live together during marriage, common law recognizes each party’s personal independent private life which is outside of the couple’s common living scope. Therefore, if a party acquires confidential information, document or evidence by spying or stealing from the other side of the marriage, such evidence will not be accepted by the Court.
For example, if one party discovers the other side’s documentary information within the common living area at the matrimonial home, that means the other side does not treat that document as private and confidential documentary
information, the other side can legally obtain and use the document as evidence of other side’s financial status. On the other hand, if the document is locked in one’s own office drawer, then it is obviously treated as private and confidential information by that party, and the other side cannot read it without permission, or else this may infringe that party’s personal privacy and right to confidentiality.
Mareva Injunction in matrimonial litigation
If during or before the matrimonial proceedings, a party has evidence to proof that the other party has transferred or hidden assets, then the party can apply for Mareva Injunction to the Court, freezing the asset or search for the suspected hidden assets. This kind of Order requires the applicant to have evidence proofing the other side’s intention to transfer or hide assets. If such Order is granted by the Court, it has great impact on the other side of the matrimonial proceedings and putting the applicant in an advantageous position.
For any issue regarding matrimonial litigation in Hong Kong, kindly consult our solicitors in matrimonial litigation team.