The COVID-19 pandemic has presented unprecedented challenges for economies, societies, and the individual. In the context of matrimonial and family life, the onset of the SARS-CoV-2 coronavirus has had a real impact on couples and families, whether they are looking to get married under strict social distancing rules, settling divorce disputes when things don’t work out, or caring for their children under unforeseen circumstances such as mandatory quarantine orders. When the pandemic has already turned everything upside down, mishandling personal and family affairs that matter the most can have long-lasting consequences for all the parties involved and compound pandemic anxiety.
Be mindful of new caveats in divorce proceedings
For those planning to tie the knot in Hong Kong, the Marriage Registry has remained open for business throughout the pandemic. However, with looming uncertainty over the future and tight social distancing rules, many couples have decided to put their wedding ceremony and reception plans on hold. For couples seeking to separate through a divorce, court proceedings in Hong Kong were adjourned periodically at the beginning of the pandemic, which accumulated a substantial backlog of applications that has led to longer wait times.
The impact also runs much deeper than inconveniences to ceremonial or court proceedings. The economic downturn and uncertainty caused by the pandemic can affect family dynamics and tip the delicate balance of financial arrangements, as unexpected redundancies or requests for no pay leave can add significantly to existing financial burdens, and diminish the value of the family pot.
The new realities of the pandemic can impact the division of assets or previously agreed maintenance sums in divorce. During the divorce process, parties should be cautious in any disposal of their properties, and are advised to not sign any sale and purchase agreement before receiving the other party’s consent. Otherwise, the other party may object to the sale and issue an injunction against such sale. Unless there is a decree absolute, the court has no jurisdiction to order any sale of property.
Moreover, with the property markets being volatile as a result of the pandemic, when discussing financial settlements with the spouse on the sale of property and the split of net sale proceeds, it is important to have a mechanism in place to determine the realistic sale price and not just the valuation price. If the situation is handled inadequately, the court will need to be involved, which can involve extra time and costs.
For family-run businesses, the pandemic is more than likely to have an adverse impact on its operations and valuations. While past financial records are a useful indicator to assess current value, it is also important to remind the third-party valuer of the actual impact of the COVID-19 pandemic to the business when conducting the valuation report.
Family expenses may also fluctuate during the pandemic, for example limited travel costs due to restrictions, or increased childcare costs. Parties to a divorce should note that while they are obliged to disclose their current expenses, they may also provide information about their pre-COVID expenses, so that the court can take into account and assess the family’s standard of living in a more accurate manner.
Child protection remain a paramount concern
One of the sometimes overlooked aspects of the pandemic has been the wellbeing of children. School closures have deprived many children of a familiar routine and the opportunity to socialise with friends and teachers at a stage of life where they need it most. The border closures between the Mainland and Hong Kong have greatly increased the difficulty of family reunions for cross-border families. Rigorous mandatory quarantine requirements when a family member tests positive, or deemed a close contact of a positive COVID-19 patient have put immense pressures on families with young children, and the risk of separating children from their parents/caregivers can have adverse and long-lasting psychological effects on all members of the family.
At these uncertain and challenging times, extra attention and care must be given to protect the health, wellbeing, and safety of children and families. The interest of children is of utmost importance at all times, and necessary and feasible measures must be taken to safeguard their growth and development.
Innovative solutions for new problems
While society and families continue to adjust to the new normal, it would be dangerous to sweep the underlying stress and anxiety under the rug as the situation continues to evolve. Prolonging disputes in a family context can have devastating consequences. For couples who are seeking divorce but caught out by the backlog of cases in court, Alternative Dispute Resolution (ADR) methods such as marriage counselling, family mediation, collaborative practice, and private financial adjudication (PFA) can offer a more amicable and cost/time-effective way to resolve disputes for all the parties involved.
During the COVID-19 pandemic, Rita led her team to advise on Hong Kong’s first, and the only PFA case since the pilot scheme was first introduced in 2015. The 5-day trial was initially scheduled for April 2020, the onset of the pandemic adjourned the case to November 2020, despite all the preparation work having been completed. The parties to the case wished to conclude the proceedings swiftly to move on with their lives, and agreed to explore PFA to avoid further undue delays. Rita represented the wife in a private adjudication conducted before a retired Judge. The whole process was conducted in a timely manner in the middle of the pandemic, which only took 3 months to reach final decision from the start. The date of the actual hearings, the venue, and the Judge chosen to adjudicate on the matter were all within the choice of the parties involved. To date, this landmark case remains the only case of PFA in Hong Kong.