FITZCHEUNG NICHOLAS v. FITZCHEUNG TSE SIU CHUNG

1997, No. 246
(Civil)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

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J U D G M E N T

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Rogers, J.A. :

1. This is an appeal from a judgment of H.H. Judge de Souza given on 30 April 1996. The proceedings before the District Court Judge were matrimonial proceedings and in particular what was being sought was ancillary relief.

2. The parties were married in 1985 but separated in 1987. There was a matrimonial home namely a flat in Waterloo Road which was given to the husband and wife by Lena Cheung Chi Tao, a sister of the husband. Lena Cheung died in 1992.

3. When the matter came before the Judge, he ordered that the Respondent, the wife, should transfer her interest in the flat to the Petitioner, the husband, but correspondingly the Petitioner should pay the Respondent a lump sum of $1.2 million within 6 months from the date of the judgment. The basis upon which the Judge had approached the case was that the Petitioner was a man who suffered several medical problems. He had suffered from epilepsy and also from schizophrenia. As such, the husband found it difficult to find work and was at one stage living on public assistance. After that ceased, he then received a small monthly amount from his elder brother. On that basis, the Judge found that the best solution which he could arrive at in accordance with the requirements of the Matrimonial Proceedings and Property Ordinance, Cap. 192 was to divide up the property in the way he did and make a clean break.

4. During the evidence, the Judge had been told that there was no inheritance due to the Petitioner from his late sister, Lena Cheung. Indeed, in the judgment at page 10, the Judge said :-

"I am satisfied that the husband has made, by the time of the trial, full and frank disclosure of his financial position. It is quite plain that he has no prospect of inheritance despite suggestions to the contrary. He has received no inheritance from either his father or his late sister, Lena. There is no evidence to suggest that he is the beneficiary under any trust created by his father or sister."

5. After the order was drawn up, the Respondent's solicitors wrote to the Petitioner's solicitors to find out the Petitioner's wishes in respect of the transfer of her portion of the interest in the flat in accordance with the order. It seems that his original solicitors were no longer instructed and the matter was not taken any further. However, after the six months had expired, the Respondent's solicitors pursued the claim in respect of the $1.2 million. This was met with correspondence saying that the Petitioner was attempting to put that money together.

6. Eventually, in February of 1997, the Respondent's solicitors became aware of the fact that the Petitioner was the beneficiary under the will of the late Lena Cheung to the extent of 25% of the estate. Copies of correspondence from the solicitors dealing with the estate intimated that at that stage the estate was in excess of some $7 million less the amount of the estate duty owing. The solicitors appear to have been in difficulties in coming to some arrangement with the Commissioner of Inland Revenue about the amount that was owing. As a result of that, the matter was brought back before the District Court Judge and on 5th December of last year, he gave leave to appeal his judgment out of time on the basis of the new evidence which had come to light.

7. Before us Mr. Fitzcheung says that due to difficulties with his elder sister Anna, who is the executor under his sister Lena's will, he is by no means certain that he will in fact receive any money because his sister Anna has been unwilling to sign the necessary documents which will release the money. Furthermore, Mr. Fitzcheung says that the amount that is likely to come to him as a result of the will is likely to be about $1 million and not the slightly higher figure as the letter from the solicitors handling the matter had previously indicated.

8. Mr. Fitzcheung has also indicated that since the judgment in the Court below, he has now been in receipt of payments of interest amounting to approximately US$2,500 per month. This comes as interest on a lump sum which is held in trust for himself and his brother under a trust which he called the Cheung trust although neither nor his brother were entitled to capital under that trust.

9. These are matters which were not before the Judge. In the light of the very careful and detailed judgment of the Judge below, I have no doubt that if these matters were known to him as they should have been, he may well have made a different order to that which he has made and he would certainly, it seems to me, have taken the likely inheritance into account. I draw attention in this respect to section 7(1) of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (as it stood at the date of the judgment below) :

"(1) It shall be the duty of the court in deciding whether to exercise its powers under section 4 or 6 in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say -

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

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(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring."

10. In the course of his submissions, Mr. Fitzcheung has made various offers and proposals as to what arrangements could be made between himself and his wife but in my view it is not for this Court to come to a decision as to that. This appeal should be allowed and the matter should be remitted to the Judge below to deal with on the basis of the evidence, which as is now apparent, can be taken into account in this case.

11. I would therefore allow this appeal accordingly.

Mortimer, V.-P.:

12. For the reasons that have been given by Rogers JA, I agree that this matter must be remitted to the judge so that he can take into account the prospects of the husband under his sister's will in reaching his conclusion. Had he known about this at the time of the hearing, it may have made a difference to the result and the judge would certainly have taken it into account.

13. I therefore agree that the appeal should be allowed and this matter should be remitted to the judge for his further consideration. His discretion in reaching a conclusion having done that, is of course not in any way fettered by our decision.

Nazareth, V.-P.:

14. I also agree for the reasons my Lord has given that the appeal must be allowed and the matter remitted to the judge below to deal with the matter of the inheritance that the respondent may receive under the terms of the will of his deceased sister, Lena.

The appeal is accordingly allowed and the matter remitted to be heard by the judge below