LSL v. MCH

FCMC 12904/ 2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 12904 OF 2010

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BETWEEN

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DECISION
(Supplemental Order)

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1.  This application concerns the construction and interpretation of a consent order reached by the parties during their FDR hearing.

2.  Since the consent order is in English and all the legal principles and authorities are in English, I think it is more preferable to have this Decision given in English as well.  I have arranged an interpreter to explain this Decision to the Respondent wife who is acting in person.

Background

3.  The parties divorced in December, 2010 after having married for about 28 years.  At that time, the property in dispute in the ancillary relief proceedings was the former matrimonial home which was in the sole name of the Petitioner husband.  Both parties were represented on the instructions of the Director of Legal Aid.  At the conclusion of the FDR hearing on 24^th August, 2011 (“the FDR hearing”), the parties reached a settlement and a Consent Order (“the said Order”) was made accordingly. The relevant provisions of the said Order read as follows,

UPON hearing the Solicitors for the Petitioner and the Solicitors for the Respondent.   AND UPON the Respondent undertaking to allow the Petitioner to occupy the premises situate at Flat 2, 30th Floor, (deleted), Shatin, New Territories, Hong Kong rent free until 31st August 2012.  AND UPON the parties undertaking and agreeing to pay 50% of the management fees, water, electricity and gas charges, rates and government rent each.   IT IS ORDERED BY CONSENT THAT :   1. Respondent shall pay to the Petitioner a lump sum of HK$500,000 in the following manner: (a) HK$100,000 payable to the Director of Legal Aid for the Petitioner within 14 days from the issue of the Decree Absolute; (b) The balance of HK$400,000 be payable by 80 instalments of HK$5,000 per month such payment to be made one month after the payment of the HK$100,000, and thereafter subsequent payments to be made on the 15th of each and every month thereafter.   2. Petitioner shall upon receipt of the full payment of the lump sum transfer all his legal and beneficial interest or share in and of the property at Flat 2, 30th Floor, (deleted), Shatin, New Territories, Hong Kong to the Respondent (subject to the consent of The Housing Authority/relevant department and the First Charge of the Director of Legal Aid) at Nil consideration and shall execute all documents for such transfer and do all things necessary to effect such transfer.  The costs and disbursements for such transfer including the application for the relevant consent letter if required shall be borne by the parties in equal shares.   3. Should the Petitioner fail to sign the relevant transfer documents the Respondent be at liberty to apply to request the Registrar of High Court to sign the relevant transfer documents on the Petitioner’s behalf and to the Petitioner shall indemnify the Respondent for the costs of and occasioned by applying to the court for such purpose.   4. …   5. … (emphasis added)

4.   For the ease of convenience, I will refer the Petitioner as the husband, the Respondent as the wife and the former matrimonial home, the Property.

The Wife’s Application

5.   Things went well until after 31^st August, 2012 when the husband continued to live in the Property.  As it was obvious that the husband had no intention to move out, the wife applied for an order that the husband shall move out from the Property and that the husband shall pay half of the rates, government rent and management fee until the ownership of the Property is transferred to the wife.  This is the application now before me.

6.   It is not in dispute that the husband is still occupying the Property, together with the wife and 2 grown-up daughters. It is also common ground that the wife is still making her $5,000 monthly payments and the husband is still paying his half share of the outgoings.

The Wife’s Case

7.   The wife’s case is that according to the settlement reached in the FDR hearing, the husband could stay in the Property up to 31^st August, 2012 only, and that is the reason why she gave the undertaking in the said Order.  Now that the husband reneges on the agreement, the wife is coming to court for remedy.

The Husband’s Case

8.   The husband denies there was such an agreement.  Ms. Tang, acting for the husband, puts forward a number of arguments in opposition.

9.   First, she argues that the husband has not given any undertaking that he shall move out from the Property. It is the wife who has given an undertaking.  Hence, the husband has not breached any undertaking by staying in the Property.    Also, the Order does not deal with what happens after 31 August 2012. 

10.   Secondly, the ownership of the Property has not yet been transferred to the wife as she has not fully paid the transfer price of HK$500,000.00 to the husband.  The husband is still the legal and beneficial owner of the Property.  As such, he is entitled to occupy his own property. 

11.   Thirdly, the court does not have jurisdiction to make an order evicting the husband from the Property under the Matrimonial Proceedings and Property Ordinance (Cap. 192) as it is not a proceedings in which the custody or upbringing of the minor is in question, and accordingly the requirement that the court is to regard the welfare of the children as the first and paramount consideration in such proceedings does not arise.  She relies on the House of Lords case Richards v. Richards [1983] 2 All ER 807.

12.   Fourthly, the Domestic and Cohabitation Relationships Violence Ordinance (Cap. 189) is not applicable in the present circumstance as the husband and the wife are no longer husband and wife.  The decree absolute was granted on 12^th September 2011.  The two daughters of the family are over 18.  There is no molestation or need for protection of the minors.   

13.   Fifthly, the wife is only entitled to an injunction sought if she could make out a legal right which would give the court power to grant an injunction under the District Court Ordinance (Cap. 336).  In addition, it has been established that the Court only has jurisdiction to grant injunctions for the purpose of protecting legal or equitable rights. However, the wife is not the legal or beneficial owner of the Property.  Therefore, she has no right to occupy the Property to the exclusion of the husband.  She says that in any event, the Family Court has no jurisdiction to force the husband to leave the Property as he has interest in it.  Besides, the said Order does not say that the husband has to leave.

14.   Ms. Tang also argues that the said Order cannot be amended because there has not been any clerical mistake or error in the order so that the slip rule under Order 20, Rule 11, RHC could be invoked.  She further argues that the court is functus officio and has no jurisdiction to revisit the said Order.  Even if a judgment or order has been obtained by fraud or with the lack of authority of the solicitors, the proper way to impeach an order is to start a fresh action to set aside the said Order.

15.   Finally, she argues that if the wife considers that the said Order does not reflect the agreement of the parties, she should appeal against the said Order, but on the strength of the authorities that she relies on, for the reason that the husband is the owner of the Property, the wife’s appeal would fail.

16.   She asks that the wife’s application be dismissed in order to protect the legal right of the husband to occupy the Property.

Analysis

17.   Apart from Richards v. Richards, supra, Ms. Tang also cites Ainsbury v. Millington [1986] 1 All ER 73, M v. M [1988] 1 FLR 225 and Lucas v. Lucas [1992] 2 FLR 53 and some other English cases in aid, which I do not think I need to refer to.   Suffice for me to say is that I have no argument over these English authorities such as Richards v. Richards, supra and the established legal principles on amendment of an order.  However, as Ms. Tang has conceded, none of these cases cited by her involved an Order which was made by consent pursuant to a settlement.  Further, I have no doubt that the wife has an interest in the Property by virtue of the provisions of the said Order, which, I note, also been registered at the Land Registry against the Property.   The wife has also been making her payments punctually and hence has certainly part-performed her deal.

18.   Be that as it may, with respect, I think Ms. Tang has missed the real issue.  As I said, I take the view that this application turns on the proper construction and interpretation of the said Order.  That is, whether or not according to the said Order the husband needs to move out after 31^st August, 2012.

19.   The hearing of 3^rd January, 2013 was adjourned for the husband to obtain the transcript of the FDR hearing.

20.   It is clear from the transcript that when the negotiation progressed to its final stage, the parties agreed that the wife was to purchase the Property in the sum of $500,000.  The wife was to pay a lump sum of $100,000 first, and the balance of $400,000 was to be paid by way of 80 monthly instalments of $5,000 each, which meant over a period of more than 6 ½ years.  The only outstanding issue was the length of occupation by the husband in the Property.  According to the transcript, the husband initially asked for 3 years but the wife expressed that she would only allow him to stay up to the end of 2011 (see transcript 11B - 12T).   Then after a short adjournment for further negotiation, the parties were able to present a consent summons for the Court’s endorsement.

21.   The court file keeps the original consent summons signed by the parties and their legal representatives.  I have referred the parties to this document.  It can been seen that initially it was provided in the consent summons (at para 4) that “the Petitioner shall have the right to occupy the premise rent free until 31^st August, 2012 provided the parties pay 50% of the management fees, water, electricity and gas charges, rates and government rent each.”   The transcript shows that the learned judge presiding over the FDR hearing was of the view that this provision should be by way of an undertaking and the parties agreed to change it to become what it is now, i.e. an undertaking by the wife to allow the husband to stay up to 31^st August, 2012.

22.   It seems to me crystal clear that the agreement reached at that time was that the husband was allowed to stay up to 31^st August, 2012, which was 2 years shorter than what he originally asked for and 6 months longer than the wife initially intended to allow. 

23.   Indeed, even without the transcript, I would still come to the same conclusion for the simple reason that if it had not been for the agreement, it would simply make no sense at all for the wife to give the undertaking.   Ms. Tang stresses that the husband is still the owner of the Property and hence, the wife has no right to evict him.  In my view, it is entirely irrelevant as to whether the husband is still retaining an interest in the Property or he is still on record the sole owner of it.  If he has agreed to move out, he is bound by his bargain.  Looking at the said Order as a whole, it is plain to me and, in my view, to any reasonable reader that the husband could only stay up to 31^st August, 2012.  This situation is not dissimilar to one where a vendor agrees to allow a purchaser to take possession of the property before the completion of the sale and purchase. 

24.   It is clear that the husband now reneges on his agreement and he is not allowed to do so.  The wife is essentially seeking implementation of the said Order.  I have no doubt that the court has the jurisdiction to make a supplemental order.  Authorities on this can be found in Para 20/11/6 of the Hong Kong Civil Procedure (2013), which says as follows,

(3) There is jurisdiction to make upon proof of new facts an order supplemental to an original order, e,g, to direct that certain costs should not be paid until the persons to whom payment was directed had complied with a former order.  Thus, the court has power to make a supplemental order to an order for specific performance that there be an inquiry as to damages sustained by reason of the defendant’s delay in completing the agreement, at any rate from the date of the original order for specific performance Ford-Hunt v. Singh [1973] 1 W.L.R. 738; [1973] 2 All E.R. (1889) 59 L,J, Ch. 63) and the court also has power to make by way of supplemental order any alternative order whatever which might be appropriate in the changed circumstances to secure the due performance of the defendant’s obligations (Northern Counties Securities Ltd v. Jackson & Steeple Ltd [1974] 1 W.L.R. 1133; [1974] 2 All E.R. 625).  Where a judgment for specific performance has been given at the instance of a vendor, an order may be subsequently made at his instance, if the purchaser does not obey it, for rescission and forfeiture of deposit (Hall v. Burnell [1911] 2 Ch. 551; Holford v. Trim [1921] W.N. 243, and cases there cited); and where a purchaser obtains the usual order for specific performance but subsequently repudiates, the vendor can on motion obtain an order for rescission and forfeiture of deposit (Jackson v. Bishop, unreported, February 24, 1922, where the vendor was given costs of the motion but no other order as to costs was made, the defendant having contested the existence of the contract).

25.   A recent local example can be found in L v. C, CACV 169/2006 (date of Judgment:  12^th July, 2007).  In that case, the Court of Appeal set aside an order by the court below requiring the husband to transfer to the wife the property in question but the Court of Appeal did not make any order regarding the vacation of the property by the wife.  The Court of Appeal subsequently made a supplemental order that the wife should move out within 6 months’ time.

26.   Here, the changed circumstance is that the husband now refuses to leave. I consider this is an appropriate case for me to give a supplemental order that he is to vacate from the Property.  Once it has been identified that the court has the jurisdiction, it is not necessary for me to consider whether or not the court has any other jurisdiction under the legislations referred to by Ms. Tang.

Order

27.   Given that the husband should have moved out from the Property 7 months ago.  I think it is only fair that he should move out as soon as possible.  I will give a further 21 days for him to look for alternative accommodation.  I order that the husband to vacate from the Property on or before 16^th April, 2013.  Needless to say, the parties should continue to pay 50% of the management fees, water, electricity and gas charges, rates and government rent up to and inclusive of the date of moving out by the husband. 

Costs

28.   The costs should follow the event.  I see no reason why the wife should not be entitled to costs.  I have heard parties’ submissions on costs.  I have also considered the wife’s statement of costs for the purpose of summary assessment.  I do not accept that the wife’s costs are as much as $22,080 as claimed.  However, I do accept that she has suffered certain loss of income and out of pocket expenses in preparing for and attending the hearing.  Doing the best I can, I would award at a rate of $250 per day.  I would allow her 2 days’ time in taking out the summons and preparing for the hearing and another 2 ½ days’ time in attending the hearings of 12^th November, 2012 (callover hearing), 3^rd January, 2013, 22^nd March, 2013 and for receiving this Decision.  This gives a sum of $1,125 ($250 X 4 ½ days).

29.   I order that the Petitioner do pay the Respondent costs of this application by way of summary assessment in the sum of $1,125.