HAK (also known as HABK) v. BID

FCMC 8732/2007

[2021] HKFC 29

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 8732 OF 2007

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Mode of Hearing:  By way of written submissions

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D E C I S I O N

(Sharing of Sale Proceeds)

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1.  This is a hearing of the Respondent (“R”)’s summons dated 21 March 2017, but restricted to paragraphs 2 and 7 therein only.  In the said summons, R asked for:

“…

2. The Petitioner do pay to the Respondent the sum of HK$953,501.00 on or before the 30^th day of June 2017 in full and final settlement of the Respondent’s outstanding entitlement.

…

7.  Costs.”

2.  In essence, what really needs this court’s determination is how to implement the judgment granted by HH Judge Bruno Chan dated 15 July 2009 as supplemented by His Honour’s further order dated 13 December 2010 (collectively the “AR Judgment”).   As HH Judge Bruno Chan has already retired from the Judiciary, the case has now come before me for a determination.

3.  R is acting in person and the Petitioner (“P”) is represented by Messrs John M Pickavant & Co.

Brief Introduction

4.  As can be told by the case number, this case has a very long history.  In order to cut a very long story short, I will only recite the chronology that is directly relevant to the present application.

5.  The petition for divorce was filed on 20 July 2007.  A decree absolute of divorce was granted on 18 February 2010.

6.  For the issue of ancillary relief, and after a full trial, HH Judge Bruno Chan granted the following orders which were in full and final settlement of the parties’ claims for ancillary relief against each other:

(1)  The matrimonial assets amounting to HK$11,772,799 to which the sum of HK$928,827 must be added being the money expended by R from joint funds or sale proceeds for his legal costs incurred in the proceedings to be divided equally between the parties.

(2)  In order to give effect to the above order, the assets were to be distributed as follows:

(i)  A property in Hong Kong shall be retained by P;

(ii)  A property in Canada shall be retained by R; and

(iii)  The property situated at and known as LV7, Baan Yamu, Phuket, Thailand (“the Baan Yamu Property”) shall be sold and the net proceeds of sale shall be divided between the parties is such proportion to bring the total value of the parties’ assets to more or less equal.

(3)  There be liberty to apply for further directions as to the implementation of the order.

(4)  There be no order as to costs.

7.  On 13 December 2010 (which order was later amended on 6 January 2011), presumably under the liberty to apply provision, the parties came before the learned Judge again and obtained a further order in respect of the Baan Yamu Property including the following terms:

“1.  There be further directions in respect of paragraph 2(iii) of the Order dated 15 July 2009 in relation to the sale of the property situated at and known as LV7 Baan Yamu Phuket Thailand (“Baan Yamu Property”) as follows:

(a)  That the two selling agents namely Company Vauban and Tropical Properties Limited having been appointed by [the wife] shall proceed to sell the Baan Yamu Property for not less than THB 18 million forthwith and with the net sale proceeds to be paid into the Hong Kong District Court in the absence of agreement between the parties on how to deal with those proceeds.  AND FURTHER the said real estate agents are directed to communicate with [the husband] or his personal representative on all matters in relation to the sale of Baan Yamu Property including but not limited to jointly setting the listing price of the property, confirming the location of the registration documents to the said property, informing [the husband] of all offers to purchase the Baan Yamu Property, providing all conveyancing details including copies of the relevant documentation as to any lease transfer and villa sale of a Thai buyer any lease cancellation and sale of the land by Phuket Prime Property Limited and villa sale and purchase agreement by [the wife] and providing details of agent’s costs and commission for acting on the sale.

(b) ….” (italics and underline added)

8.  It can be seen that the major direction under the 13 December 2010 Order (as amended on 6 January 2011) was to add in a reserved price of THB 18 million for the sale of the Baan Yamu Property. However, the imposition of the reserved price has posed a major difficulty in the full implementation of the AR Judgment in view of the undisputed crash of the Thai real estate market thereafter.  It was obvious that the THB 18 million reserved price could never be realized under the current economic situation.

9.  I was glad to note that both parties could finally come to agree on a more practical approach in selling the Baan Yamu Property at the current prevailing market price and the net proceeds of sale of HK$2,799,728.90 has now been paid into court.  The remaining issue is how to divide up this sum of money between the parties by reference to the orders of Judge Bruno Chan in the AR Judgment, in particular, how to achieve a more or less equal division of the total family assets.

10.  At the hearing on 2 December 2020, I direct the parties to lodge their written submissions on the division of the sale proceeds within 14 days.  Upon reading their submissions, I direct that further submissions were to be made, after which I now proceed to make a determination on the division of the sale proceeds by reference to the AR Judgment.

Discussion

11.  It is to be noted that in the AR Judgment, after the determination on the size of the family pot at HK$12,701,626 (HK$11,772,799 + HK$928,827 = HK$12,701,626), the Hong Kong Property was given to P and the Canadian Property was given to R.  It was further decided that the sale proceeds of the Baan Yamu Property were to be divided between the parties so as to achieve a more or less equal sharing of the family pot.

12.  If one should read the AR Judgment itself, Judge Bruno Chan has already made a ruling on the assets given to or being retained by the respective party.  I will repeat paragraphs 95-96 of the AR Judgment here for ease of reference:

“95. My assessment of the assets are therefore as follows:

[P] (in title or possession)	HK$
[Baan Yamu Property] (THB 18 m)	$3,933,000
Bank accounts/Pension	$108,143
Others (Jewelry, Inheritance)	$885,598
	$4,926,741
Less Liabilities	$804,395
Net	$4,122,346
[R] (in title or possession)
Bank accounts	$611,741
Pennilee/Lakewood Golf Membership	$325,000
Shares	$2,488
Pensions	$143,671
Inheritance	$737,184
Others	$253,002
	$2,073,086
Less Liabilities	$110,211
Net	$1,962,875
Joint Assets
[Canadian Property] (C$547,000)	$3,651,566
Mortgage (C$296,032)	- $1,975,953
[Hong Kong Property]	$4,180,000
Mortgage	- $1,326,000
Bank Accounts	$5,145
Companies	$538,543
Personal	$600,000
	$5,465,719
Joint Liabilities (storage costs)	$25,000
Net	$5,440,719
Total	$11,772,799

96.  As noted above, this sum of HK$11,772,799 should be added back any money which [R] may have withdrawn from the joint funds or sale proceeds for his legal costs incurred in these proceedings for the purpose of their proper distribution.”

13.  In the AR Judgment, it was Judge Bruno Chan’s ruling that R has to account for the $928,827 that he has spent on his legal costs and such sum was to be added back to the family pot, thus making it a total sum of HK$12,701,626 (HK$11,772,799 + HK$928,827 = HK$12,701,626).  It was submitted by P that there was a miscalculation in the adding up of the joint assets under paragraph 95 of the AR Judgment.  But as pointed out by R, when both parties appealed against the AR Judgment, the Court of Appeal has refused to correct those figures in view of their relative minor nature. Therefore, I am not minded to re-calculate the size of the family pot by reference to this relatively small discrepancy.  In the circumstances, when this court adjusts each party’s final entitlement to the reduced sale proceeds of the Baan Yamu Property, each party might not get an exact amount of 50% of the sum of $12,701,626.  Instead, I will ensure that each party will get a more or less equal sum from the family pot at the end of the day.

14.  In order to do this, it is important to ascertain how much money each party has already taken or retained from the family pot and by reference to those figures, the sharing of the sale proceeds of the Baan Yamu Property (at HK$2,799,728.90) could be made so that each party will be given more or less an equal share of the family pot.

15.  Under the AR Judgment, P has already received or retained the following sums from the family pot (excluding the Baan Yamu Property):

In P’s title or possession	HK$
Bank accounts/Pension	$108,143
Others (Jewelry, Inheritance)	$885,598
	$993,741
Less Liabilities	$804,395
Net	$189,346
From Joint Assets
[Hong Kong Property]	$4,180,000
Mortgage	- $1,326,000
Personal (50%)	$300,000
	$3,154,000
Joint Liabilities (50%)	-$12,500
Net	$3,141,500
Total	$3,330,846

16.  On the other hand, R has received or retained the following assets from the family pot:

In R’s title or possession	HK$
Bank accounts	$611,741
Pennilee/Lakewood Golf Membership	$325,000
Shares	$2,488
Pensions	$143,671
Inheritance	$737,184
Others	$253,002
	$2,073,086
Less Liabilities	$110,211
Net	$1,962,875
From Joint Assets
[Canadian Property] (C$547,000)	$3,651,566
Mortgage (C$296,032)	- $1,975,953
Bank Accounts	$5,145
Companies	$538,543
Personal (50%)	$300,000
	$2,519,301
Joint Liabilities (50%)	-$12,500
Net	$2,506,801
Other
R’s legal costs	$928,827
Total	$5,398,503

17.  From the above calculation, I am satisfied that P has received or retained the sum of $3,330,846, whilst R has received or retained the sum of $5,398,503.  In order to equalize their receipt from the family pot, I am satisfied that P should be given $2,433,692.95, whilst R should be given $366,035.95 from the sale proceeds.  After such adjustment, P will get $5,764,538.95 ($3,330,846 + $2,433,692.95 = $5,764,538.95) and R will also get the same amount of $5,764,538.95 ($5,398,503 + $366,035.95 = $5,764,538.95).

18.  In the parties’ written submissions, both of them have put forward other factors for the court’s considerations.  For example, P has submitted that she should be reimbursed of certain expenses in furnishing the Baan Yamu Property.  On the other hand, R has submitted that he should be given a share of the rental income of the Baan Yamu Property before the sale of the property.  As I have indicated before the adjournment, I am not prepared to go into anything beyond Judge Bruno Chan’s AR Judgment and therefore, it will serve no useful purpose in discussing those submissions in this Decision.  The only issue herein for my determination was how to divide up the sale proceeds by reference to Judge Bruno Chan ‘s rulings in the AR Judgment, and nothing more.

Orders

19.  Based on the above reasons, I hereby grant an order that the sum of $2,799,728.90 now retained in court shall be paid out as follows:

(1)  A sum of $2,433,692.95 shall be paid out to P; and

(2)  A sum of $366,035.95 shall be paid out to R.

Costs

20.  I do not see any clear winner in the application and an appropriate order is for no order as to costs, including all costs reserved.  This will be in the form of an order nisi to be made absolute upon the expiry of 14 days from the handing down of this Decision.

Representation: