LYMC v. LCW

FCMC 13526/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 13526 OF 2015

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JUDGMENT

(Leave to appeal : implementation of a property sale order)

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The Order to be appealed

1.  The petitioner of this case is the wife, while the respondent is the husband.

2.  By his summons dated 16 October 2017, the husband seeks to appeal out of time the order made by this court on 29 June 2017 (“Order”).  The Order concerns consequential directions on the implementation of the sale of the former matrimonial home that the parties have agreed to sell and distribute the sale proceeds pursuant to a consent order reached during the FDR (financial dispute resolution).

3.  In gist, the Order provides that (only the relevant parts are set out below but not in verbatim):

(1) The husband do deliver vacant possession to the matrimonial home on/before 29 August 2017, failing which the wife be granted vacant possession of the same forthwith;

(2) The wife shall have the conduct of the sale in appointing estate agents and conveyancing solicitors;

(3) The husband shall sign all requisite documents to effect the sale of the matrimonial home within 7 days upon notice of the wife, failing which the wife shall be authorised to sign all necessary conveyancing documents on his behalf pursuant to section 38A of the District Court Ordinance;

(4) The husband do give a set of keys of the matrimonial home to the wife upon his vacating from the matrimonial home on/before 29 August 2017;

(5) Neither the husband nor the wife shall occupy or live in the matrimonial home upon the same is vacated;

(6) The husband shall not lock his bedroom and/or other rooms inside the matrimonial home when it is inspected by potential purchasers and/or estate agents.

4.  Upon hearing his application, I refused to grant him leave to appeal, with reasons to be handed down. The following are my reasons.

Case history and FDR settlement

5.  Briefly by way of background, the wife was born in 1973 and is now about 44 years old. At the material times, she is a registered nurse with an income of about $50,517 per month. The husband was born also in 1973 and thus also about 44 years old. According to his Form E dated 11 April 2016, he is a senior auditor with an average income of $15,000. In this hearing, he reveals that he has just got a new job with an income of $17,000.

6.  They were married in 1997. Their son was born in 2003 (now aged 14) and their daughter was born in 2006 (now aged 11). The wife filed her petition for divorce in October 2015 on the ground of unreasonable behaviour of the husband. The petition was later amended to 2 years’ separation, the separation time being in/about February 2013. Decree Nisi was granted on 23 December 2016, which was made absolute on 16 February 2017. Their marriage is a long one of almost 20 years.

7.  By a consent summons made into a consent order dated 7 October 2016, the parties have joint custody to the children, with care and control granted to the wife. The husband has reasonable access set out more particularly in the said consent order.

8.  In so far as their ancillary relief matters are concerned, it is not disputed that during their marriage, they bought a flat in South Horizon in 2002. This became their matrimonial home until the wife moved out of it together with the children in/about October 2016 to another rented flat in South Horizon. Since then, the husband has occupied the matrimonial home all by himself.

9.  The parties appeared before this court in the FDR on 20 December 2016. The major issues involved the maintenance of the children and the sharing of the matrimonial home. For the purpose of the FDR, parties have agreed the value of the matrimonial home is around $8,810,000. The outstanding mortgage is about $1,780,000. The estimated net value is thus about $7,030,000.

10.  Settlement was finally reached between them during the FDR and a consent summons was tendered to this court for approval, which was then made into a consent order (“Consent Order”).

11.  The Consent Order provides, inter alia, that:

(1) Subject to the grant of the decree absolute, the matrimonial home be sold at $8,810,000 or market price to be mutually agreed by the parties on/before 21 March 2017 (ie about 3 months from the Consent Order);

(2) The net sale proceeds, after deducting necessary costs and outstanding mortgage, are to be shared equally between the parties;

(3) Within 7 days upon receipt of the net sale proceeds, the husband shall pay a sum of $1.3 million out of his share of the net sale proceeds into a joint account for the purpose of paying children maintenance, whereby the parties shall give joint instruction to the bank for paying out a sum of $8,000 per month ($4,000 per child per month) into the wife’s sole bank account until the children complete their full time tertiary education;

(4) Any remaining balance under paragraph (3) above shall be returned to the husband.

12.  For the purpose of selling the matrimonial home, the husband agrees to:

(1) vacate from the matrimonial home upon the signing of the preliminary sale and purchase agreement, or on/before 21 March 2017, whichever is the earlier;

(2) facilitate and/or allow reasonable inspection to the matrimonial home;

(3) pay all management fees, government rates and rents and utilities during his occupation therein.

After the FDR settlement

13.  By a summons dated 3 April 2017, the wife seeks to obtain further directions from this court on the implementation of the Consent Order. In very broad terms, she asks that:

(1) Vacant possession of the matrimonial home be granted to her;

(2) She shall have conduct of the sale of the matrimonial home;

(3) The husband shall sign the requisite conveyancing documents to effect the sale within 7 days upon request, failing which the Registrar of the District Court shall be requested to sign the conveyancing documents pursuant to section 38A of the District Court Ordinance.

14.  In the supporting affirmation filed by the wife and dated 30 March 2017, she deposes that:

(1) the husband, while continuing to occupy the matrimonial home all by himself, has failed to settle the mortgage repayment in full, as a result of which she has to pay the arrears out of pocket;

(2) the husband has changed the lock to the matrimonial home without her prior knowledge. As a result, she is unable to allow access for potential purchasers to inspect the matrimonial home;

(3) On those occasions where potential purchasers are allowed into the matrimonial home for inspection, the husband would lock all the doors therein to prevent a full and comprehensive inspection;

(4) As a result, the matrimonial home is still not sold even though the deadline provided in the Consent Order, ie 21 March 2017, has well passed.

15.  The husband did not turn up in the call over hearing of the wife’s summons on 5 June 2017, despite that service of the same was effected on him. The matter was thus adjourned to 29 June 2017.

16.  On 29 June 2107, the husband turned up.  During the hearing, he agreed that he has changed the lock to the matrimonial home and has not given a set of new key(s) to the wife. He also conceded that albeit he was in sole occupation of the matrimonial home, he has not paid for its mortgage repayment since December 2016, which meant that the wife has to bear the mortgage repayment during this period, let alone that she has to shoulder all children expenses by herself.

17.  After a brief discussion of the case, the matter was adjourned for parties to attempt negotiating for settlement.

18.  When the case was re-called, the husband finally confirmed that he was willing, among other things, to:

(1) open the bedrooms of the matrimonial home for property viewing;

(2) move out of the matrimonial home on/before 29 August 2017;

(3) agree that the wife shall have the conduct of sale;

(4) agree that his 50% share of the mortgage repayments will be paid by the wife initially and for the time being, and the same shall be deducted from his share of the net sale proceeds.

19.  Accordingly, the Order was made in the hearing of 29 June 2017.  Almost 3.5 months later, ie on 16 October 2017, the husband takes out his summons for leave to appeal.

Applicable legal principles

20.  Section 63A(2) of the District Court Ordinance provides that leave to appeal shall not be granted unless the intended appeal has a reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard.

21.  The relevant test of whether an appeal has a reasonable prospect of success is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal.  A reasonable prospect of success therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable” (See: SMSE v KL [2009] 4 HKLRD 125; KNM v HTF, HCMP 288/2011).

22.  On the other hand, under Order 58 rule 2(4) of the Rules of the District Court, Cap 336H, the husband should have filed his leave to appeal application within 14 days from the date of the Order. It is accepted by him that his application for leave to appeal is out of time.

23.  The court has a discretion to grant leave to appeal out of time. For the benefit of the husband (who is unrepresented in this hearing), I shall set out the factors for consideration, namely:

(1) The length of delay;

(2) The reason(s) for delay;

(3) Prospect of success of the intended appeal application;

(4) Whether the grant of leave to appeal out of time would cause prejudice to the opposite party.

(See: LSW v LMYM, HCMP 1085/2006; 黃對潘, HCMP 2749/2014)

Delay

24.  To begin with, the husband accepts in this hearing that there is a delay on his part in taking out his application. He also accepts that the delay is a serious one. Yet, he has not provided any reason(s) for his delay in his supporting affirmation. In all fairness to him, I invite him to give his explanation orally. He purports to give only one reason for the delay, ie he is not aware of the content of the Order until he has received the same from the wife’s former solicitors.

25.  I would reject his explanation outright. It is inconceivable and impossible that he is unaware of the terms of the Order because he was there and had fully participated in the hearing of 29 June 2017, which lasted from about 10 am until about 3.30 pm.  He is an educated person and has obtained qualification of an auditor. He has not advanced a case that he is a person under disability, so that he would have difficulty in understanding the proceedings and what he has agreed during the hearing.  

26.  Besides, according to the court records, the Order was sealed and filed on 31 July 2017. The husband has not explained why it takes him until 16 October 2017 to lodge his summons for leave to appeal.

27.  Upon due consideration, I am unable to accept his reason for delay.

Prospect of success

28.  Be that as it may, the more important factor to consider here is whether he will have a reasonable prospect of success in his intended appeal.  In his supporting affirmation (dated 16 October 2017), he purports to give the following brief reasons (in English translation):

“The matrimonial home [full address] is a self-owned property purchased by way of a government loan obtained by me. It is my housing benefit in Hong Kong. It is also my only residence. I have no means to move out from it now.”

29.  It is not clear to this court, despite that I have asked him to clarify it during this hearing, if the husband is now trying to suggest that the matrimonial home was purchased by him, so that the wife should not have any right to share, or to share that much of, its interest.   If he was really so suggesting, then I have to point out that this is a novo argument of him which has not been claimed by him in any of the prior hearings or in the FDR. It is now too late for him to put forward this argument. In any event, this argument has overlooked the indisputable fact that the wife has also contributed to the payment of mortgage repayment.

30.  More importantly, he has not lodged any appeal against the Consent Order, which is the primary order providing for the sale and sharing of the matrimonial home and which leads to the consequential directions set out in the Order (that is now under appeal). He is thus still bound by the Consent Order under which the matrimonial home has to be sold.

31.  Furthermore, one must not overlook the prejudice that would cause to the wife if his leave to appeal out of time is allowed.  As a matter of fact, the wife, now acting in person in this hearing, submits that the husband is now enjoying the occupation of the matrimonial home all by himself without paying for its mortgage, let alone children maintenance. According to her Form E, her totally monthly expenses are about $59,000. She has been shouldering the mortgage repayment and all children expenses in the last 10 months, which she finds it difficult to sustain without affecting the children’s status quo arrangement and in the result, she has to cut their tutorial and interest classes. She complaints that the husband is merely employing a delaying tactic to vacate from and sell the matrimonial home.

32.  It must be remembered that the intention of selling the matrimonial home is not only for asset distribution, but also for the husband, who claims that he has difficulty in making financial provision for his own children, to realise sufficient funds for children maintenance way forward. In my view, to grant leave to appeal out of time would further delay the achievement of this intention which in turn is not in the best interest of the children of the family. To safeguard the best interest of the children of the family is the paramount duty of the family court. 

33.  In view of the above, I cannot see the husband would have any reasonable prospect of success in his intended appeal, and thus leave to appeal out of time should not be granted to him.

Conclusion

34.  Due to the matters set out above and for completeness, I would repeat what I have concluded and ordered in this hearing:

(1) The husband’s summons dated 16 October 2017 for leave to appeal out of time is dismissed;

(2) There be no order as to costs of this application.