SUSAN CAROLINE BERRY v. WILLIAM ALLAN

1995, No. DJ6

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

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R U L I N G

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1. On 1st September, I had placed before me an application made by the Respondent, Mr Allan, who was represented by his sister, Dr Alison Allan. The application was made ex parte but upon notice to the Petitioner's solicitors and sought three separate orders. The first related to school fees for the child of the marriage and was essentially an application seeking directions for payment of interim maintenance for the child. The other two applications related to properties in England and sought orders to protect those properties from legal action thereby preserving them as family assets for consideration in future ancillary relief proceedings.

2. Although the application was upon notice to the Petitioner and there had been earlier correspondence, the papers had only been served on the solicitors for the Petitioner that morning. Not surprisingly, therefore, there was no appearance on behalf of the Petitioner. I therefore ordered that the application be adjourned until the following afternoon with further notice served on the solicitors for the Petitioner. The following afternoon I was shown copies of two faxed letters sent to those solicitors and was told that the Respondent himself had spoken to a secretary employed by that firm. Despite this, there was no appearance.

3. The non-appearance of the Petitioner left me in some difficulty. In my judgment, all three matters should originally have been brought before this court by way of inter partes summons with time allowed in terms of the rules for the Petitioner, if she wished, to file an affidavit in reply. I, of course, appreciated that neither the Respondent nor his sister were experts in matters of Family Law but that did not absolve them from having to follow correct procedures. In other circumstances, therefore, I would have dismissed the application. But in my judgment, the two matters concerning properties in England were urgent and further delay could have had the most serious financial ramifications for both parties.

4. It appears that the two properties in England consist of an apartment in Mill Bank, London, which I shall call the London flat, and a dwelling in Leicester which I shall call the Leicester house. Essentially, the London flat has been looked after by the Respondent while the Leicester house has been under the supervision of the Petitioner, this despite the fact that both properties are in the joint names of the parties.

5. The property which concerned me most was the London flat. This is mortgaged to Lloyds Bank. However, I was advised that (for reasons not entirely clear) the mortgage had been allowed to fall into arrears in an amount of 15,400. Lloyds Bank had threatened legal action. The problem was compounded by the fact that, after a long period of standing empty, tenants had moved into the London flat but somehow it seemed that their lease documents had gone missing and they had also threatened legal action if their quiet possession of the flat was disturbed. Put bluntly, if I did not make an early order, there was a very real danger that Lloyds Bank would take early action to foreclose on the mortgage and consequent upon that the tenants would take action too.

6. For these reasons, Respondent requested the court to order that a sufficient sum of money be released from court and paid to Lloyds Bank, those moneys being drawn from a sum paid into court by the Respondent much earlier in this litigation. I was advised that the capital amount paid into court was approximately HK$2,000,000 and with interest would now be in the region of HK$2,200,000; the amount to be paid to Lloyds Bank could therefore be taken from accrued interest without touching capital.

7. Although there was no appearance for the Petitioner, I was advised that some time earlier, before the Petitioner went on her summer holiday, she had said that she had no objection in principle to the necessary funds being released.

8. On all the evidence available to me at the time, I considered it imperative, therefore, to order payment to Lloyds Bank to preserve the family asset and prevent litigation in regard to that asset. This court does have jurisdiction in its administrative capacity to take necessary steps to preserve family assets. If there was to be any argument as to whose negligence brought about the situation, that could be canvassed at the final ancillary relief hearing and, if the court thought fit, computed into its judgment.

9. I turn now to the Leicester house. In respect of this property, I was advised by Respondent that the Petitioner had for some time been receiving rentals from the long-standing tenant but had not been crediting those funds to the mortgage account held by the Hongkong Bank. As a result , this bank too had threatened legal proceedings. I was advised that there was far greater equity in this property and the risk off loss would therefore have had greater ramifications.

10. In respect of this property, the Respondent was effectively asking for a mandatory injunction, the nature of the injunction being that the tenant be directed by the Petitioner to pay all future rentals direct to the Hongkong Bank. I was informed that the tenant had agreed to pay as directed if both parties agreed or there was a court order made.

11. The Respondent also sought an order that the Petitioner deliver up copies of the tenancy agreements in respect of the Leicester house. Essentially, I understood this to be an application for specific discovery which could perhaps have been made at a different time in less hurried circumstances. But, in the interest of saving costs, accepting that it was a valid request, I made the order.

12. I come finally to the matter of the child's school fees. In this regard, from what I saw of the correspondence, it appeared that the child had been in danger at one time of being suspended from school or not being granted a place in a new class in the new school year. I am constrained to say that I find it regrettable in the extreme that between them the Petitioner, a practising medical doctor, and the Respondent, a barrister now practising again, could not resolve the issue of school fees which only amounted to some HK$4,500 per month. Be that as it may, I did not consider the application in regard to fees to be one of such urgency that I should deal with it on anex parte basis. The Respondent had already taken steps to pay the necessary moneys. This was and remains a matter frankly which, with a modicum of compromise, should be settled between the parties. For a matter to be argued in the High Court by two practising professionals over a monthly sum of approximately $4,000 payable in any event on an interim basis only comes close to being frivolous and vexatious.

13. In the end result, in the absence of Petitioner, I made all the orders which appear at the end of this ruling with the exception only of my orders as to costs. I set the return day for 25^th September.

14. On 8^th September, Petitioner's solicitors appeared before me, having applied to vary my orders on 48 hours notice. The Respondent, represented by his sister, was present. Having heard argument from both parties, I declined to change my orders. This was subject, however, to an undertaking formally given by the Respondent to take such steps as may be necessary to ensure that all rental payments received in respect of the London flat be paid without deduction into the mortgage account held by Lloyds Bank. The undertaking mirrored my directions to the Petitioner given in terms of my order 2(a) below.

15. I was also assured by counsel for the Petitioner that her client was now taking all necessary steps to comply with my directions given under 2(b) below but may not be able to do so within the time stipulated. The Respondent would, however, be kept advised and agreed to adopt a reasonable approach as to delay.

16. Having had the benefit of the Petitioner's submissions I was able to order that the return date set for 25^th September be vacated.

17. In the final analysis, therefore, my orders are as follows -

1. THAT the Respondent's application for an order that Petitioner make provision for payment of half of the school fees of the child of the marriage, Natasha Allan, be dismissed. For the avoidance of doubt, should Respondent wish to bring an inter partes application for maintenance in respect of the said child or for directions as to such maintenance, he should not by reason of this dismissal be barred from so doing.

2.

(a) THAT upon the Respondent giving an undertaking to do the same in respect of all rental payments received in respect of Flat 5, 60 Mill Bank, London; that is, by paying such amounts without deduction to Lloyds Bank, the Petitioner be directed forthwith to take such steps as may be necessary to ensure that all rental payments received in respect of the property situated at 1 Cranborne Gardens, Leicester, England, registered in the joint names of the Petitioner and Respondent, be paid without deduction into the mortgage account held by the Hongkong and Shanghai Banking Corporation such payment to continue to be so made until further order. (b) THAT the Petitioner do, within 30 days of the date of this Order, provide to Respondent copies of all tenancy agreements which relate to the aforesaid property and which were entered into on or after 1st January 1994.

3. THAT leave be and is hereby granted to the Respondent to remove from those funds held by the Court in this matter such sum of money in Hong Kong dollars as shall be the equivalent of GBP15,400 (pounds sterling) subject to the condition that such sum shall be paid forthwith by Respondent to Lloyds Bank Mortgages Ltd. to liquidate the arrears due and payable to the said company by way of mortgage repayments in respect of the property being Flat 5, 60 Mill Bank, London, England, which is registered in the joint names of the Petitioner and Respondent.

4. THAT in respect of costs, with the exception of the application concerning school fees and the Respondent's appearance before this court on 1^st September, in respect of both of which there shall be no order as to costs, costs are awarded to Respondent.