RE TYT AND ANOTHER

CAMP 192/2020

[2021] HKCA 454

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 192 OF 2020

(ON AN INTENDED APPEAL FROM FCJA NO. 3690 OF 2017)

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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. Leave to appeal

1.1 Deputy District Judge Doris To dealt with four summonses, three issued by the 1^st applicant husband  (‘Husband’) and one by the 2^nd applicant wife (‘Wife’).  The Husband’s applications were :

1) To set aside the Wife’s dispositions to their daughter under section 17 of theMatrimonial Proceedings and Property Ordinance, Cap. 192 (‘Section 17 Summons’);

2) Joinder of the daughter as an intervener in the setting aside application (‘Joinder Summons’); and

3) Injunction to restrain the daughter from further dissipating the Wife’s dispositions (‘Injunction Summons).

1.2 The Wife’s application was to adduce further evidence in response to the Section 17 Summons (‘Post-hearing Evidence Summons’).

1.3 The Judge held against the Husband on his applications and held for the Wife in her application.

1.4 The Husband applied for leave to appeal against the Judge’s decision on the four applications.  The leave application in respect of the Injunction Summons and the Post‑hearing Evidence Summons were made out of the time.  The Husband also sought leave to appeal against the Judge’s decision on costs.

1.5 The leave applications were refused by the Judge and the Husband now renews his application before us.  The application is opposed by the daughter.  We will deal with the application on paper.

II. Background

2.1 In short, the parties have applied for a joint application for divorce.  As part of their divorce agreement, the Wife is entitled to RMB 100 million in cash to be paid in the first tranche of RMB 40 million and the second tranche of RMB 60 million.  The Wife is also entitled to the Belcher property (‘the Belcher property’) (the Husband said that there were two properties) and the former matrimonial home (‘the Divorce Agreement’).  The Wife’s dispositions to the daughter are to the value of HK$93.34 million, comprising of the first tranche payment of RMB 40 million, the sale proceeds of the Belcher property, and the sale proceeds of the former matrimonial home.  

2.2 The Wife’s position is that she is seeking ancillary relief against the Husband and is not bound by the Divorce Agreement. The Husband’s primary case is that the Divorce Agreement should be upheld but alternatively he claimed that the Wife’s assets far exceeded his and the Wife should be the payor in the ultimate division of the family assets.  As commented by the Judge, one can see immediately that the Husband’s stance is embarrassing in that notwithstanding his contention that the Wife is far richer than him, he was prepared to enter into the Divorce Agreement and paid the Wife RMB 10 million.

III. The Judge’s decision

3.1 The Judge found that the Wife had no intention to defeat the Husband’s claim by dissipating assets.  She found the Husband’s contention that the Wife would be the ultimate payor not supported by evidence.  On the contrary the evidence showed that the Husband would be the payor.  The Judge further relied on the evidence of the daughter that the Husband was the beneficial owner of a substantial part of the assets, namely shares in a listed company that the Husband alleged the Wife had not disclosed. 

3.2 The Judge varied the order nisi on costs on the four applications on her own accord when she discovered that the word ‘forthwith’ for the payment of costs which she intended to impose was missing from the orders she made.

IV. Overview

4.1 It is useful to take an overview of the Judge’s observation on the respective value of assets of the parties.

1) Wife’s disclosed assets

4.2 The Wife said she has HK$40.9 million and she is willing to add back HK$93.34 million that she had given to the daughter, making a total of HK$134.3 million.

2) Husband’s disclosed assets

4.3 The Husband said he has $186.8 million.

3) Husband’s case of Wife’s assets

4.4 The Husband said the Wife has HK$1,500 million undisclosed assets made up of

(1) HK$1,388.8 million as the value of shares in the listed company held in the Wife’s name;

(2) HK$9.7 million (shops);

(3) HK$100 million (value of securities); and

(4) HK$14.5 million (the Wife’s claims in legal proceedings).

4.5 The total assets of the Wife should be $1,650 million (HK$134.3 million and $1,500 million).

4) Husband’s assets based on Wife’s valuation of the shares     

4.6 The Wife said the shares should only be valued at HK$173.6 million and not $1,388.8 million.  In any event, the shares belonged to the Husband beneficially. Hence, the Husband’s assets should be HK$1,575.6 million ($186.8 million and $1,388.8 million).

4.7 As the Wife said the shares should be HK$173.6 million, alternatively, the Husband’s assets are HK$360.4 million ($186.8 million and $173.6 million).  Even on this alternative basis, the Husband’s assets still exceed the Wife’s assets.

V. Our view

5.1 The Judge summarised the Husband’s grounds of appeal as contained in his draft grounds of appeal and addressed them in turn.  It is unnecessary for us to repeat them again.  We agree with the Judge’s view that the proposed grounds are not reasonably arguable and it is sufficient for us to make the following comments. 

5.2 The Husband’s argument that the Judge adopted the wrong approach in the Section 17 Summons by determining the issue of who would be the ultimate payor or payee in the distribution of family assets : This issue was raised by the Husband.  The valuation of the shares was also raised by him. On the face of a public document the Husband admitted that he was the beneficial owner of the shares and he had not challenged the daughter’s contention on this point.  These are all related to the Husband’s contention that the disposition by the Wife should be set aside and the necessity to join the daughter and to apply for an injunction to restrain her from disposing the HK$93.34 million.  In our view the overview of the assets of the parties that the Judge had identified is most useful and relevant.  It is not to say that in every Section 17 Summons, the Judge must identify who is the payor or payee first.  Clearly the exercise conducted by the Judge was predicated on the issues raised in the case.  The Judge was, of course, not dealing with a full ancillary application and her findings could only be based on a broad‑brush approach grounded on what was available on the affidavit evidence before her.  This cannot be criticised as being a wrong approach or that the Judge had erred in principle.

5.3 The Husband’s contention that the Judge was wrong to consider that the Wife had agreed to add back HK$93.34 million to her assets when the money had already been dissipated and there would not be anything left to be transferred back to him if he is eventually successful : Again what the Judge did was to provide an overview of the assets of the parties in considering the Husband’s submission that it is the Wife who would eventually pay him.

5.4 The Husband’s contention that the Judge erred in her finding that the Wife did not have the intention to dissipate : There was clear evidence to support such finding. It is not reasonably arguable that the finding is plainly wrong.  In any event the Wife was entitled to deal with the assets under the Divorce Agreement and she had fully disclosed the transfer.  It was only afterwards that the Husband sought his alternative ancillary relief.

5.5 The Husband’s contention that the Judge erred on the injunction issue : The Judge clearly was entitled to exercise her discretion against the granting of the injunction on the facts of the case. 

5.6 Evidence on the valuation of the shares was adduced by the Wife in her application for further evidence.  The Judge called them Post‑hearing Evidence because the Wife applied for them to be adduced after the Husband’s Section 17 Summons and Joinder Summons were heard but before their determination.  The Judge recognized the Wife’s application was late but considered that the evidence was relevant to the payor and payee issue that she had to address.  She made no order as to costs between the Wife and the Husband on the Wife’s application to adduce further evidence.  The order was a nisi order.  We cannot see how the Judge can be faulted.

5.7 The Judge was clearly entitled to put right the costs orders she had intended to make in the first place.  There is no merit in the Husband’s challenge.

VI.    Conclusion

6.1 The Husband has failed to satisfy the threshold for obtaining leave.  Accordingly, the application is dismissed with costs to the daughter.  There is no order as to costs between the Husband and the Wife, as the Wife has indicated that she would take a neutral stance on the Husband’s application.  This Court will assess the costs summarily.  The daughter is to file and serve her statement of costs within ten days.  The Husband is to lodge his objections within ten days thereafter.

6.2 As the Husband’s application is totally without merit, pursuant to Order 59, rule 2A(8) of the Rules of the High Court, we will make an order that no party may request our determination to be reconsidered at an oral hearing inter partes.