Breakdown of Trust: Important Court of Final Appeal divorce ruling reaffirms the Court's power to consider assets held in trust as part of the matriomonial estate and the presumption of the equal division of assets

The case of Poon Lok Otto v Kan Lai Kwan Kay and HSBC International Trustee Ltd. arose out of the high-profile divorce of a wealthy couple and the ramifications for the family business, Analogue Group, an increasingly common occurrence in Hong Kong and further afield. The Court of Final Appeal ("CFA") judgment found overwhelmingly in favour of the wife and, as a result, maintained its close association with the position in England as being one of the friendliest jurisdictions for the less financially well-off spouse. The case also highlights the difficulties of using a trust structure to protect assets from a spouse.

Gareth Thomas and Richard Norridge examine the CFA decision on issues including the proper approach to discretionary trusts, the operation of estoppel in divorce cases, and division of assets, with key take-away points, here.