YUEN TAM WAN v. HO CHAN YUET LAN and Another

1993, No. 41
(Civil)

IN THE COURT OF APPEAL

(On Appeal from the District Court of Hong Kong

Family Court Miscellaneous Proceedings

Action No.90 of 1992)

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J U D G M E N T

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Nazareth, J.A.:

1. This is the judgment of the Court.

2. The appellant ("Madam Yuen") appeals against the order of His Honour Judge Surman made on 9th February 1993 dismissing her application for review of his earlier order of 9th November 1992. By that order he set aside an assignment to Madam Yuen by Ho Kai Hung ("the husband") of the Ground Floor, No.22 Tai San Street in Cheung Chau ("the property").

3. Having heard counsel's submissions, we allowed the appeal, and made orders setting aside the judge's order, such order not to take effect for 7 days to give the respondent ("the wife") time to take such action as she might deem advisable, and giving Madam Yuen her costs of the appeal and below. We now give our reasons.

4. The matter arose in the following way. After some 12 years of marriage to the wife in the People's Republic of China, the husband left for Hong Kong in about 1962 or 1963, and never went back. From 1969 onwards he cohabited with Madam Yuen. The property was purchased in May 1983 at a price of $200,000 and registered in the names of the husband and Madam Yuen as joint tenants.

5. In December 1988 the wife came to Hong Kong and three months later the husband made the disposition of the property to Madam Yuen. In July 1990 the wife commenced divorce proceedings against the husband by a petition in the District Court, asking for ancillary relief of maintenance pending suit, lump sum payment and periodic payments. A decree nisi was granted in July 1991 and on 6th September 1991 the husband was ordered to pay interim maintenance of $2,000 a month.

6. On 8th July 1990, the wife commenced Miscellaneous Proceedings Action No.90 of 1992 seeking to set aside the assignment of the husband's share in the property under s.17(1)(b) of the Matrimonial Proceedings and Property Ordinance. Her originating summons came up for hearing before the judge, at which she was unrepresented, on 9th November 1992. Her application for review was heard by the judge on 9th February 1993 when she was represented. Both matters were heard on the basis of affidavits. Madam Yuen's case was that her mother provided $140,000 of the $200,000 purchase price with the balance being secured by mortgage which she herself paid off without the assistance of the husband. She was told and accepted that cohabitation meant marriage. Although the purchase money was provided by her mother, brothers and by herself out of her savings, as a traditional Chinese woman she believed that she should not hold the property in her sole name while she had a husband; that was also what her mother believed. All along the husband only held the property on trust for her and her mother.

7. Mr Henry H.Y. Lo who appeared for Madam Yuen, pursued only grounds 5 to 8, which are set out in Madam Yuen's supplementary notice of appeal. We propose to address first ground 6(a) which is in the following terms:

"(6) Further or alternatively, the learned Judge erred in law in setting aside the Disposition in that :-

(a) The learned Judge failed properly or at all to direct himself to consider the matters as specifically required by section 17(1)(b) of the [Matrimonial Proceedings and Property] Ordinance in setting aside a disposition."

8. Section 17(1)(b) of the Matrimonial Proceedings and Property Ordinance is in the following terms :-

"17. Avoidance of transactions intended to defeat certain claims

(1) Where proceedings for relief under any of the relevant provisions of this Ordinance (hereafter in this section referred to as 'financial provision') are brought by a person (hereafter in this section referred to as 'the applicant') against any other person (hereafter in this section referred to as 'the other party') the court may, on an application by the applicant-

(a) ..........

(b) if it is satisfied that the other party has, with the intention aforesaid, made a disposition to which this paragraph applies and that if the disposition were set aside financial provision or different financial provision would be granted to the applicant, make an order setting aside the disposition and give such consequential directions as it thinks fit for giving effect to the order (including directions requiring the making of any payment or the disposal of any property);

(c) ..........

and an application for the purposes of paragraph (b) shall be made in the proceedings for the financial provision in question."

9. Plainly, and we did not understand it to be disputed, in order to exercise the power to set aside the disposition under s.17(1)(b) the court has to be satisfied that three requirements are met:

(1) that the other party made a disposition;

(2) that the other party made such disposition with the intention of defeating the claim for financial provision; and

(3) that if the disposition were set aside financial provision or different financial provision would be granted to the applicant.

10. It is Mr Lo's submission that the judge failed to satisfy himself in respect of any of those requirements.

11. Insofar as he may be said to have done so, the judge dealt with the foregoing three requirements in the following part of his judgment:

"Conclusion

In this unusual case, I was satisfied that the Cheung Chau Property (in which the Husband had a share as a joint tenant with the 2nd Respondent during his lawful marriage to his Wife) should now be considered in the context of the Wife's application for a lump sum payment.

In my view, the holding of this Property had to be frozen pending the full hearing of the Wife's application for financial relief. The Wife's affidavits satisfied me on that score. I certainly was not persuaded by Husband's or the 2nd Respondent's affidavits that I should adopt any other course. I was suspicious about the veracity, reliability or relevance of large parts of the 2nd Respondent's affidavit.

Although the retention of Property might have been met by undertakings given by the 2nd respondent not to dispose of the Property, I decided that the better course was to set aside the transfer altogether so as to place the parties in the positions they were in before the marriage was dissolved."

12. At first sight it is difficult to see where the judge expresses findings or satisfaction that the three requirements have been met. However Mrs Wacks submits that such satisfaction is implicit. She points to the judge's suspicions and reservations about large parts of Madam Yuen's affidavit and submits that the judge rejected her evidence. For argument sake we would accept that, and also that the judge was entitled to do so. However that is a far cry from a finding that the husband was the beneficial owner of a share in the property, which the judge could not have been unaware could lead to Madam Yuen losing that share, given the undertakings he accepted from Madam Yuen not to dispose of the property. In those circumstances, had he intended to make such a finding he would certainly have given careful care to his determination of that issue and made some mention of the process by which he did so. That does not appear in his judgment particularly in his conclusion. On the contrary, in our view a fair reading of the judgment and particularly the judge's decision leads clearly to the conclusion that far from finally determining the issue, he took the view that "the holding of this Property had to be frozen pending the full hearing of the wife's application for financial relief" and that he wished to preserve the status quo until the whole matter was decided. While one can readily appreciate the justice of that approach, particularly having regard to the inappropriateness of determination of such contentious factual issues on affidavit, whatever power or provision might have enabled him to do so, it clearly cannot have been s.17(1)(b). To resort to that provision, he would first have to be satisfied that the husband was beneficial owner of a share of the property, the very issue being deferred. Before we leave the first requirement we would add that we reject Mrs Wacks' submission that the words "in which the husband had a share as a joint tenant with [Madam Yuen] ...." is a finding by the judge that the husband was beneficial owner of such a share. In our view those words are no more than a reference to the husband being shown as a joint legal owner, which was entirely consistent with his holding title as a trustee.

13. Turning to the second requirement, plainly the judge did not direct himself to it. That perhaps is understandable, for in our view he was not seeking to finally determine the matter. Moreover, unless the judge had first concluded that the husband was beneficial owner of a share of the property, it is difficult to see how he would proceed to the question of the disposition being made with the intention of defeating the wife's claim for financial provision.

14. As to the third requirement, since there was in the action before him no application for financial provision or different financial provision, the judge could hardly have concluded that if the disposition were set aside, financial provision or different financial provision would be granted to the applicant. Indeed it is plain that no such provision or different provision would be granted. It is no less plain that the judge did not address that matter. As we have said, in our view, far from seeking to finally determine the issue, he had decided to freeze the position pending a full hearing.

15. The requirements under s.17(1)(b) not having been met, it was not open to the judge to set aside the disposition under that provision. It followed that the appeal had to be allowed and the order set aside. It was therefore not necessary to address the other grounds of appeal.