LWSE v. LPT

HCMP 107/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 107 OF 2017

(ON AN INTENDED APPEAL FROM FCMC NO. 15829 OF 2015)

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

I. The injunction

1.1  This is a renewed application by the husband respondent for leave to appeal against the decision of Deputy District Judge D. Cheung who dismissed his application to discharge an injunction granted by Deputy District Judge A Yim on the ex parte application by the wife petitioner on 20 January 2016 and continued inter partes on 27 January 2016.

1.2   By the injunction, the husband was restrained from dealing with a time deposit kept in the HSBC account up to the value of HK$1,486,196.70.  The Judge, however, modified the terms of the junction by allowing the husband to withdraw HK$3,000 per month with effect from 31 August 2016 by transferring the sum of $3,000 per month from the restrained HSBC account to the account designated by the wife as part performance of the husband’s obligations under the existing interim maintenance order for the maintenance of the wife and the daughter.

1.3   The Judge further ordered that credit would be given for the payment of $3,000, and all the monthly payments will be paid on account of any sum eventually received by the wife and/or the husband when the ancillary relief is determined.

1.4   Very briefly, the wife petitioned for divorce and is pursuing ancillary relief for herself and the daughter of the family.  She contends that the joint assets of the parties are worth at least $2,936,393.40 and she is entitled to half of it or $1,468,196.70.  The husband has a time deposit in his name with HSBC in the sum of $1,838,283.21.

1.5   The wife said she discovered from the husband’s mobile phone WhatsApp messages between him and a person called Tong Gor and between him and his sister, the effect of which is that :

1) the husband had tried to evade service of the petition or tried to pretend the petition was not served upon him;

2) the husband’s sister was trying to hold money for him;

3) the husband was asking someone to pay money into the account to his sister;

4) the husband’s sister had also explicitly mentioned in the Whatsapp message about transferring assets to her and she was holding money for the husband secretly.

1.6   The wife contended that this pointed towards dissipation of the family assets by the husband and accordingly she applied for the injunction.

1.7   The Judge set out the husband’s explanation as follows :

‘ 29. The above wife’s allegation was denied by the husband. The husband stated that by suggesting that he tried to dissipate assets by asking Tong Gor to transfer money to his sister and his sister held some money for him, the wife misled the court by submitting screenshots of selected whatsapp messages and taking them out of context.

30.  The husband explained that he would like to set aside some of his earnings in order to improve his mother’s living conditions. Such improvements included purchase of a new television in replace of the old malfunctioning home appliances, and painting and general renovation of his mother’s residence, and the husband had spent HK$40,000 for such improvements.

31.  The husband also stated that there was an agreement between him and his sister that his sister would arrange for the improvements and he would repay the same to her.

32.  The husband further explained that his sister was aware of the ongoing divorce proceedings together with the fact that he had been advised that his finances would be under scrutiny, his sister was afraid that any monies spent jointly would result in complications.

33.  The husband and his sister had decided to pay his mother’s care out of monies not currently held in the Time Deposit account in his HSBC account (hereinafter called “HSBC Time Deposit”), but debts and favour paid to them by third parties.

34.  The husband stated that as a result, he asked his friends including “Tong Gor” to transfer the money owed by them to his sister’s bank account. The husband stated that the total sum of loans owed by his friends were approximately HK$50,000 in total.

35.  The husband further stated that the wife at all material times had full knowledge of the debts owed by his friends including Tong Gor.

36.  The husband also stated that the 2 whatsapp messages in Chinese were garbled out of context. The husband said that his sister’s husband is extremely against the idea of his sister keeping any “pin money”.  Therefore, his sister did not tell her husband that she had funds to pay for the renovation expenses of his mother’s residence and the dealings with Tong Gor in fear of aggravating her husband.

37.  Another whatsapp message quoted by the wife related to the fact that the husband’s sister would open a bank account when the husband’s mother paid her HK$10,000 which was from the husband. The husband said that his mother did not want to accept any money from him and his sister.

38.  The husband explained that the reason why his sister had to open another bank account was that she did not want her husband to know about the financial dealings she had with others.

39.  The husband also said that neither Tong Gor nor he himself had ever transferred the said HK$39,700 to his sister, and that the husband’s mother also did not repay them the said HK$10,000.

40.  The husband also explained that the reason why he had to repay his sister the costs on the improvements to his mother’s residence using the money from Tong Gor was to preserve the money in the HSBC Time Deposit.’

1.8   The Judge held that the husband’s explanation is not believable and held that the small amount involved is only one of the factors to be considered, the overall conduct and the actual plan of the husband is more important when considering whether there is any real risk of dissipation.  He held that :

‘ 49. There is no need for me to go into details as to whether the husband attempted to evade service of the Petition because even if the husband did not attempt to evade service of the Petition, there is solid evidence to show that the husband is planning to dissipate assets with the intention of defeating the claim for financial provision which included the wife’s potential claim for periodical maintenance for herself and the daughter.’

II.  Grounds of Appeal

2.   The draft notice of appeal consists of the following grounds of appeal :

1) The Judge erred as a matter of law and fact in dismissing the husband’s application to discharge.

2) The Judge erred in giving weight or has given undue weight to the WhatsApp messages to show the husband’s intention was to defeat the wife’s claim for financial relief, whilst the Judge confirmed that the wife failed to prove her case as to the alleged dissipation of assets by the husband.

3) The Judge erred in finding that the failure to make full and frank disclosure on the part of the wife, particularly, in relation to her own financial condition when making the application for the injunction is immaterial.

4) The Judge failed to take into account the likely nature and extent of the financial relief that the wife may receive at the trial of the ancillary relief application.

5) The Judge erred in finding that the balance of convenience does not lie in favour of discharging the injunction, whilst accepting that the husband could not afford paying the interim maintenance pending suit to the wife from his monthly income.

6) The Judge erred in ruling that the wife’s failure to conclude the matters promptly did not cause serious prejudice to the husband, which should have caused the discharge of the injunction.

III.  Grounds 1 and 2

3.1  The first two grounds can be considered together.  The application for injunction in the Family Court was made pursuant to Section 17(1)(a) of the Matrimonial Proceeding and Property Ordinance (Cap 192) (‘the MPPO’) and the inherent jurisdiction of the court, for Mareva injunction and for other associated directions.

3.2   It is not necessary for the purpose of this application to discuss the difference or similarity of these two juridical bases for injunction.  Irrespective of whether the test is for the wife to show that there is a serious question to be tried that the husband intends to dissipate the assets and the balance of convenience lies in granting the injunction or alternatively for the wife to show a good arguable case that there is a real risk of dissipation of assets by the husband, clearly, based on the existing evidence, there is a real risk of dissipation being shown. The conflict of evidence in respect of the circumstances in which the wife obtained the phone and managed to extract the messages goes to the factual background showing that is a serious question to be tried.

3.3   We do not find in the Judge’s decision that he had held the wife had failed to prove her case on dissipation.

IV.  Ground 3

4.   The husband complained of material non disclosure by the wife.  The Judge had addressed this point and we do not regard them as reasonably arguable.

V.  Ground 4

5.   The husband’s complaint is that the wife fell short in proving her entitlement to the matrimonial assets is as high as $1,468,196.70.  This is a factual dispute and the Judge had addressed this point and we do not regard it to be reasonably arguable.

VI.  Ground 5

6.1  The husband complained that the Judge erred in finding that the balance of convenience does not lie in favour of discharging the injunction.  In our view the balance of convenience lies in granting the injunction because once the money is dissipated, there is no guarantee that the wife will be able to recover them.

6.2   In our view this point is not reasonably arguable.

VII.  Ground 6

7.1  The husband complained that the Judge failed to consider the open offer made by the husband in the hearing, namely, consent to vary the injunction to $800,000 should the injunction not be discharged.

7.2   This point is not reasonably arguable as it cannot be said at this stage that the Judge has been plainly wrong in the assessment of the family assets.

VIII.  Form of the injunction

8. We had considered about whether leave should be granted concerning the form of the injunction but have decided against it having regard to the likely costs to be incurred by the parties in order to attend Court to argue on the form of the injunction.  If the husband considers the order affects the renewal of the time deposit, then he should apply to the Family Court to vary the order so that he should be allowed to divide the amount under the time deposit into two parts, one of which is to be restrained by the injunction but with the right to renewal and payment out of $3,000 per month.

IX.  Conclusion

9.1  Accordingly the application is refused. Since this application is totally unmeritorious, it is appropriate to order under Order 59, rule 2A(8) of the Rules of the High Court that no party may under rule 2A(7) request the determination to be reconsidered at an oral hearing.

9.2   The wife is entitled to the costs of the application which we summarily assessed at $30,000 inclusive of counsel’s fee at $20,000.  The wife’s own costs are to be taxed according to the Legal Aid Regulations.