The need for a solution to the problem of reciprocal recognition and enforcement of matrimonial judgments between Hong Kong and Mainland China has long been recognised. Cross-border marriages registered in Hong Kong had increased to 37 per cent by 2014 and the proportion of cross-border divorces handled by Hong Kong courts from 2010 to 2014 ranged between 20 and 30 per cent.
This represents a significant impact on families in Hong Kong and the Mainland both in terms of the divorce itself and the status of marriage, the division of assets and, most importantly, the effect on children.
It was therefore welcome news that in July 2017, Hong Kong and the Mainland agreed on a solution which would be implemented through legislative procedures in both jurisdictions later this year.
Under previous existing arrangements, Hong Kong recognises a foreign court’s decree of divorce, provided that certain statutory requirements are met. However, the Mainland would not recognise a decree from Hong Kong or any order for financial settlement or maintenance payments. On the other hand, parties divorced on the Mainland could apply for the leave of the court in Hong Kong to enforce a decree from the Mainland. Hong Kong also has legislation to deal with the reciprocal enforcement of foreign maintenance orders, but this does not currently extend to orders made in the Mainland.
This situation created real problems for the dissolution of cross-border marriages. If a marriage was dissolved under Hong Kong law but the divorce was not recognised in the Mainland, the parties were subjected to the “limping marriage” problem. In addition to being deeply unsatisfactory, it could give rise to practical problems. For example, if the man were to die, would the survivor be a widow or not?
Since Hong Kong financial awards, including those made in Hong Kong following a foreign decree, were not recognised or enforceable under Mainland law, it was virtually impossible to enforce those awards against Mainland properties and assets.
As full and frank disclosure of assets is obligatory in Hong Kong but not in the Mainland, many parties seek the jurisdiction most favourable to their case and they go forum shopping. These evidential and procedural differences result in huge disparities in the real life result of a divorce and the jurisdictional disputes that arise are expensive for the parties and time consuming for the courts. Sometimes the results are deeply prejudicial to one of the parties.
Until the agreement is ratified, there is no rule regulating the recognition and enforcement of foreign child custody orders in either jurisdiction. The Arrangement will formalise the recognition of such orders between both jurisdictions. In addition, unlike Hong Kong, the Mainland is currently not a signatory to the Hague Convention on International Child Abduction, and the Arrangement includes measures in respect of abducted children.
The Arrangement covers the recognition of divorce and nullity decrees in each jurisdiction, including 'divorce certificates' in the Mainland and customary marriages in Hong Kong.
In respect of judgments from the Hong Kong side, the Arrangement covers important matters including periodical payments, maintenance pending suit and lump sum, transfer and sale of property, orders made during the lives of parties for the alteration of maintenance payments, orders following a foreign decree, custody, adoption and injunctions.
For judgments made by Mainland courts, the Arrangement includes the division of property during the marriage, division of property after divorce, performance of an agreement made during the divorce, disputes as to agreements made by the parties, custody, parentage, adoption, guardianship, access and protection from domestic violence. It does not cover applications to the other court to vary an original order. Importantly, the Arrangement allows for simultaneous applications for enforcement in both Hong Kong and the Mainland if the relevant assets are situated in both jurisdictions.
With the mutual recognition of decrees and orders and the enforceability of orders in respect of finances and children, the uncertainty and much of the expense involved in cross-border disputes will be alleviated. The legal fraternity in both Hong Kong and the Mainland welcome the agreement that has been reached, and look forward to all parties collaborating in the final stages to implement it for the benefit of all.