MPY v. WYC AND OTHERS

FCMC 3297 / 2022

[2026] HKFC 34

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 3297 OF 2022

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DECISION
( Leave to Expunge Expert Reports )

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1.  The Petitioner and the 1^st Respondent are referred to as Husband and Wife respectively in this Decision.

2.  The Husband took out Summons on 2 June 2025 (“the Summons”) for leave to expunge the two expert reports exhibited to in the Wife’s 8^th Affirmation dated 15 April 2025 as WYC-8-1 and WYC-8-5. The Wife opposes the application.  The Husband is represented by Mr. Anthony HK Chan, SC, leading Mr. Cristian Tsang while the Wife is represented by Ms. Lily Yu.

Background

3.  The Husband and Wife were married in 1983 and their children have reached the age of majority by now. The Petition for Divorce was taken out in 2022.

4.  The parties started off by establishing their textile business and then embarked on real estate investments.  They held, together with their children, a private company called HTHK which in turn owned the shares of another company named HTSP, and the latter owned the shares of HTRE. HTRE was the owner of a piece of land in the Mainland, namely FY Plot (“FY Plot”). On 26 July 2015, HTRE was sold to another company at the price of RMB 105 million.

5.  The Husband’s case is that the proceeds were subsequently distributed among the shareholders, namely the Husband, the Wife and the three children according to their respective shareholding.

6.  However, the Wife’s position is as follows:

a)  The Wife discovered that the sale price ought to be at around RMB 640 million, and therefore the Husband has embezzled about RMB 535 million.

b)  Shortly after the sale of the FY Plot, the Husband hid a majority part of the stolen sale proceeds in a Samoa Company, of which he is the sole director and shareholder (“Samoa Company”).

c)  The Samoa Company owned two subsidiary companies, namely SP and EW.

d)  In July 2019, the Samoa Company transferred 100% shareholding of SP and EW to the 2^nd and 3^rd Respondents respectively.

7.  On 30 June 2022, the Wife took out Summons under section 17 of the Matrimonial Proceedings and Property Ordinance (“MPPO”) to set aside the said transfers.

8.  In opposing the application, the Husband filed the affirmation in opposition saying, inter alia, that:

a)  The Husband denied the alleged embezzlement.

b)  The Husband entered into a written agreement with one Mr Fong (“Fong”) on 2 June 2016 under which Fong and the Husband were to contribute HK$162 million and HK$18 million respectively, to own 90% and 10% of the Samoa Company, and under the Agreement, the Husband would hold 90% of the shares of the Samoa Company on behalf of Fong (“Yuen Long Agreement”).

c)  The Husband entered into another written agreement with Fong on 19 March 2019 that Fong would buy out the Husband’s share for HK$13 million but this amount would only be paid after Fong successfully sell the underlying lands held by Samoa Company 100% owned subsidiaries, SP and EW. Further, these two subsidiaries were to be transferred out of the Samoa Company (“Buyout Agreement”). There were 律師見證書 for the two agreements.

9.  In reply, the Wife filed the 8^th Affirmation on 15 April 2025 saying, inter alia, that the FY Plot was sold at an extremely undervalue. She claimed that she recently obtained a valuation report dated 21 March 2025 stating that the value of FY Plot as at 26 July 2016 was RMB 1,521,465,000.

10.  Further, the Wife obtained PRC legal opinion that the 律師見證書 on the Buyout Agreement was flawed, in that, it was only signed by one witnessing lawyer instead of two, and the 律師見證書 was too simple and did not provide proper evaluation on the authenticity and lawfulness of the Buyout Agreement.

11.  The Wife said that, while the Legal Opinion was issued on the Buyout Agreement only, she believed that the Yuen Long Agreement would face similar challenges.

12.  By taking out the Summons, the Husband asks for leave to expunge the valuation report and the PRC legal opinion on the ground that the Wife has failed to obtain leave or consent of the Husband to file those reports.

Procedural history

13.  The call-over hearing of the Summons was fixed before me on 28 August 2025. Attempting to explore a resolution of the matter practically, I asked the parties if they would agree to appoint an SJE, and if so, agreed issues to be dealt with by the SJE should be properly framed by the parties. The hearing was stood down for the parties to put their heads together. Despite some discussions between the legal representatives of the parties, the parties were unable to come up with any agreement or consensus. When the hearing was resumed on that day, the parties submitted separate sets of proposed directions for my consideration. Having heard submissions and considered their respective proposed directions, I made the case management directions, inter alia:

a)  Within 14 days, parties do report to the Court, by way of a joint letter, whether agreement has been reached on the issues (if any) that require expert evidence on (a) the value of 90% of the FY Plot and/or HTRE as at 26 July 2016, and (b) the witnessing process of the agreements.

b)  If there is no agreement, parties do within 14 days thereafter file submissions setting out their respective stance including but not limited to (a) what are the issues / areas that may require expert evidence, and (b) the choice of expert.

14.  However, the parties were unable to reach any agreement thereon eventually. From the written submissions lodged by the parties to the Court, one can see that the differences between them were far apart.  The Wife suggested that the SJE should deal with the valuation of FY Plot as at 2016 and whether the relevant agreements were properly witnessed. The Husband argued that the two issues were not relevant to the dispute in the section 17 application, and there was no formal application with supporting evidence to explain the relevance and necessity of the SJE. The Husband said that ancillary relief is assessed by valuing the parties’ assets at the date of trial, and there is no need to value the FY Plot as at 2016. Further, even if the Husband has stolen the money, the real beneficiary of the stolen money was HTSP and not the Husband.

15.  At that stage, the Court was unable to decide whether SJE should be appointed. First, there is no formal application to adduce expert evidence, which is important for the applying party to explain to the Court why expert evidence is necessary, what issues in dispute require expert evidence and why it is necessary to appoint an expert. The procedure under Order 38 rule 36 of the Rules of the High Court (“RHC”) should be followed. The Court cannot dictate the parties to appoint any SJE without proper hearing or argument bearing in mind the costs and other implications.

16.  Further, before leave is granted to adduce expert evidence, questions or issues have to be properly framed by the parties and approved by the Court. In case of disagreement, proper procedure should be followed such that the issue of relevancy and necessity should be thoroughly addressed and dealt with.

17.  In view of the above, I directed that the substantive hearing of the Summons be fixed.

Substantive hearing on 2 February 2026

18.  For the substantive hearing, Ms. Yu, counsel for the Wife, lodged a written submissions by arguing that:

a)  The expert reports are circumstantial evidence which requires no leave of the Court.

b)  Leave is not required when the evidence is permitted to be given by affidavit under Order 38, rule 36(2), RHC.

c)  It is premature for the Court to determine whether the reports should be expunged.

19.  At one stage during the substantive hearing, Ms. Yu asked the Court to adjourn the substantive hearing so that the Wife may take out formal application for expert evidence and the two applications be heard together. The proposed adjournment was opposed by Mr. Chan SC.

20.  In her oral submissions, Ms. Yu said that it was her misunderstanding at the call-over hearing on 28 August 2025 that the Court will make the relevant SJE directions without formal application. I do not understand Ms. Yu’s submissions. First, the Court made it clear at the call-over hearing that the Court would invite the parties to try to agree on the appointment of SJE and the issues to be canvassed by the expert. SJE directions will be considered on the basis of the parties’ agreement. In any case, the Skeleton Submissions of the Husband dated 23 September 2025 at §3 made it clear about the Husband’s stance that one of the conditions for admitting expert evidence is to demonstrate that the proposed expert evidence is relevant and necessary, and it has to be discharged properly via evidence filed in support of a properly made application.

21.  In respect of the Ms. Yu’s request for an adjournment, application to expunge and application for SJE direction can be dealt with separately, and I do not think it necessary for the present application to be adjourned. Unnecessary costs will be incurred for the proposed adjournment.

22.  Furthermore, given Ms. Yu’s argument that leave is not required in the present circumstances, I am not sure whether, at the end of the day, the Wife will take out any application for SJE directions. Time will be wasted if adjournment is granted. I refused the adjournment application.

Discussions

23.  I bear in mind that this is an application for leave to expunge the relevant reports, not an application for expert direction. I will consider each of the issues raised by the Wife first, and then whether the Husband’s application should be granted.

1.  Circumstantial evidence

24.  In her written submissions dated 26 January 2026, Ms Yu submitted that by including the reports, the Wife did not seek to prove the FY Plot was worth RMB 1,521,465,000 as at 26 July 2016, or that the PRC Legal Opinion was a definitive statement of the PRC law. The Reports were adduced by the Wife solely as circumstantial evidence in support of her case concerning the Husband’s hidden assets or the alleged buy-out by Fong. In particular, the Wife relied on the valuation report in support of her case that the FY Plot was sold at an undervalue with the price difference misappropriated by the Husband. The PRC Legal Opinion was relied upon to show that the alleged agreements were entered in suspicious circumstances, thereby casting doubt on their genuineness. These were the investigative tools used by the Wife in response to the Husband’s non-disclosure concerning the subsequent sale of the FY Plot.

25.  The Wife’s argument is difficult to understand. The real question is why the reports were included in the affirmation. The reports are certainly not included for the purpose of showing that the Wife had indeed obtained any valuation report or PRC legal opinion. Whether the Wife has, as a matter of fact, obtained expert reports is not an issue. If the reports are relied upon in the manner as described by Ms. Yu in her submissions as mentioned above, in essence, the Wife is inviting the Court to look into the contents of the reports, and in particular, the valuation of the FY Plot and the witnessing requirement of the agreements. The reports are indeed intended to be used as expert evidence. On the other hand, if it were simply the investigative tools used by the Wife to ask the Husband to make full disclosure, the reports will not assist the Wife any further.

2.  Whether leave is required

26.  Under rule 3 of the Matrimonial Causes Rules, RHC shall apply to the present matrimonial proceedings with necessary modifications.

27.  Order 38 rule 36 of the RHC provides that:

“(1) Except with the leave of the Court or where all parties agree, no expert evidence may be adduced at the trial or hearing of any cause or matter unless the party seeking to adduce the evidence—

(a) has applied to the Court to determine whether a direction should be given under rule 37 or 41 (whichever is appropriate) and has complied with any direction given on the application.

……

(2) Nothing in paragraph (1) shall apply to evidence which is permitted to be given by affidavit or shall affect the enforcement under any other provision of these rules (except of Order 45, rule 5) of a direction given under this Part of this Order.”

28.  Ms. Yu argues that whether evidence is permitted to be given by affidavit, leave requirement under Order 38 rule 36(1) of the RHC does not apply.

29.  Both parties have referred me to some of the relevant cases. The Husband relied on the case of LWF v. HCP [2025] HKFC 69 at [27] where HHJ Elaine Liu said that “[i]t is my view that O38 r36(2) does not operate to permit the use of expert evidence without leave for the trial of the Section 17 Summons even though evidence are directed to be given by affidavit. Neither is it desirable for case management purposes to allow the filing of expert evidence without leave in this circumstance”.

30.  Ms. Yu asks this Court not to follow LWF. She submits that section 17 application was commenced by summons while Order 38 rule 2(3) of the RHC allows the parties to file evidence by affidavit in the application made by summons. She relies upon the case of Tang Chi Chung v. Tang Sun Yip [2016]  1 HKC 528 which provided that leave requirement did not apply to evidence which was permitted to be given by affidavit.

31.  The case of Tang Chi Chung has to be considered carefully. The case was commenced by Originating Summons to determine whether the plaintiff was a member of a Tso. The DNA report was produced by the plaintiff but the defendants did not challenge the admissibility thereof at the first instance. On appeal, the defendants took a new point that the DNA report was inadmissible. It was on this background that the challenge to the admissibility was refused and the Court of Appeal said that the trial judge was entitled to determine how much weight shall be placed on the DNA report, which was a piece of hearsay evidence. The case cannot assist the Wife’s position.

32.  Ms. Yu also prays in aid a number of authorities on this issue. Re Jinro (HK) International Ltd, HCCW 1352/2001 (unreported, 26 July 2002) was a company winding-up case. I accept Mr. Chan SC’s submissions that any ruling has been overtaken by Practice Direction 3.4 at §8 which requires leave of the Court for filing of expert evidence exhibited in affidavit.

33.  Other cases relied upon by Ms. Yu included Re Loong San Investment Co Ltd [2014] 2 HKLRD 1116, and Hayward Industries, Inc. v. Ningbo C. F. Electronic Tech Co., Ltd & Ors [2025] HKCFI 5252. In those cases, the subject applications were interlocutory in nature. These cases do not assist the Wife.

34.  Ms. Yu also draws my attention to the case of Re a Civil Matter Pending in the United States District Court (Letter of Request)(No. 2) [2021] 1 HKC 65, in which the Court of Appeal said at §68 that in terms of the construction of Order 38, rr 36(2) and 37C of the RHC, the prohibition against admissibility for lack of expert declaration under r 37C does not apply automatically to expert evidence set out in affidavits or affirmations. Such evidence is not evidence “disclosed under these rules”. Ms. Yu adopts a similar argument that the reports was not adduced by the Wife “under these rules” such that leave to adduce those evidence is not required.

35.  I consider that Ms. Yu’s submissions is misconceived. As mentioned by HHJ Liu in LWF at [25], the practice of the Family Court is to direct parties to file affidavit as evidence for the trial including, for example, on ancillary relief dispute, and on claims under Section 17 of the MPPO. The fact that the reports were adduced by way of affirmation in the present case, per se, is by no means determinative as to whether leave is required. All depends on the circumstances and the purposes for which the reports are to be adduced. Ms. Yu submits that not every section 17 application shall be disposed of by trial. However, given the issues in dispute in this case, I fail to see how the section 17 application in the present proceedings can be disposed of as an interlocutory application without going through a trial.

3.  Whether it is premature to expunge

36.  Ms. Yu argues that the present case is now in the First Appointment stage only and the reports are useful to assist the Wife in further interlocutory applications. When being asked by the Court at the hearing as to what specific interlocutory applications were referred to, Ms. Yu replied that they included further discovery and/or further questionnaires. The Reports were useful to show that the Wife did have some evidence against the Husband and the Wife’s contentions are beyond mere allegation.

37.  I consider that Ms. Yu has failed to address the issue directly. She is unable to name any specific interlocutory application in mind, not to mention how the Reports are relevant to such interlocutory application. I do not consider that it is premature to determine whether the reports should be expunged.

4.  Whether the reports should be expunged

38.  Order 38, rule 36(1) of the RHC states that except with leave of the Court or where all parties agree, no expert evidence may be adduced at trial or at a hearing of any cause or matter unless the party has applied for directions under Order 38, rules 37 or 41. As mentioned before, Order 38, rule 36(2) is not applicable to our situation.

39.  Application for leave to adduce expert evidence is required so that, before making the directions, the Court shall have sufficient evidence to consider whether the subject matter of opinion do fall within an area in which expert evidence may be given, the witness is qualified as an expert for that question, and his evidence is relevant to the disputed issues.

40.  In the present case, no agreement has been reached between the parties on the expert evidence to be adduced. In fact, the issues of relevancy and necessity are in dispute. Moreover, the Reports failed to comply with the relevant formalities. No experts’ declaration or statement of truth was attached.

41.  Without prejudice to the Wife’s intended application for SJE directions (if any), I consider that the valuation report and the PRC Legal Opinion should be expunged.

42.  In paragraph 3 of the Petitioner’s Summons, the Husband asks for leave to file and serve supplemental affirmation to the Wife’s 8^th Affirmation dated 15 April 2025. Given that the Wife’s 8^th Affirmation is already an affirmation in reply, by simply expunging the reports, I fail to see why the Husband should be allowed to file a further affirmation. No order is made for paragraph 3 of the Summons.

5.  Costs

43.  Costs should follow the event. I will make the costs order on nisi basis with certificate for one counsel.

Conclusion

44.  I shall make an order in terms of paragraphs 1 to 2 of the Petitioner’s Summons dated 2 June 2025.

45.  There be costs order nisi that the costs of the Petitioner’s Summons be paid by the 1^st Respondent to the Petitioner with certificate for one counsel.

46.  If no application for variation of costs order nisi is made, the Petitioner shall submit his statement of costs (limited to 3 pages at font 14 with double line spacing) within 21 days from the date hereof and the 1^st Respondent shall submit her lists of objection (limited to 3 pages at font 14 with double line spacing) within 7 days thereafter.

47.  Unless otherwise directed, summary assessment of costs shall be determined by paper disposal without oral hearing.