LPS v. HKC

CAMP 306/2019

[2020] HKCA 161

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 306 OF 2019

(ON AN INTENDED APPEAL FROM FCMC NO. 6928 OF 2015)

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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.   Background

1.1  The parties are former husband (‘H’) and wife (‘W’).  They were married in July 2011 and separated in April 2013.  The marriage lasted for a relatively short period of 21 months.  They did not have children.  The W petitioned for divorce in June 2015.  At trial the H was 55 and W was 39.

1.2  In the W’s application for ancillary relief H H Judge George Own identified the family assets as follows :

-	Landed properties in joint names (Property A in Tsuen Wan and Property B in Kwai Chung)		$8,840,000
-	H’s shares		$3,080,180
-	W’s shares		$94,132
-	DBS Hong Kong Bank Limited (‘DBS’) account in joint names		$1,000,000
-	UCO Bank Limited (‘UCO’) account in joint names		$530,000
-	W’s other savings		$54,575
-	Diamond Ring		$173,888
-	Rental Income (Property B)		$355,500
			$14,128,275

1.3  For convenience, the Judge used a round figure of HK$14,128,000.

1.4  The Judge ordered the H to pay the W HK$7,352,000 and costs of the application for ancillary relief.

1.5  The Judge also granted a deferred order for the sale of Property A and Property B in the open market by the H and W jointly in the event that the W could not receive her share of the award within 30 days from the date of the judgment.

1.6  The Judge held that the sum of HK$7,352,000 is made up as follows :

‘109. Applying equal division between the parties, each party should be receiving HK$7,064,000 (that is, HK$14,128,000 x ½ = HK$7,064,000).

110.  However, for the reasons in paragraph [82] above, there will be an additional HK$288,000 to W to be deducted from H’s share.  Thus, the parties’ respective shares on ancillary reliefs are :

H’s share:HK$7,064,000–HK$288,000= HK$6,776,000

W’s share:HK$7,064,000+HK$288,000=HK$7,352,000 ’

1.7  Paragraph 82 of the judgment is as follows :

‘ 82. On the day of trial, H had been using Property A as his residence together with his mother and a domestic helper without accounting to W, the other joint owner, for her interests in Property A. Hence, some adjustment would have to be made in W’s favour in the computation exercise to try and reflect W’s share of the revenue/income that would otherwise had been received by her had Property A, which is a mortgage free property, been rented out. W was not provided with any such revenue/income and also unable to have the use and enjoyment of Property A. I decided that the net adjustment amount, also taking into account those necessary expenses such as government rates and rent, to be 5% of the value of Property A, that is, HK$288,000 (HK$5,760,000 x 5% = HK$288,000).’

1.8  The H applied for leave to appeal against the judgment and was refused by the Judge.  He now renews his application for leave to appeal before us.  We will consider the application on paper.

II.   Property A and Property B

2.1  The Judge found that the H owned Property A and Property B prior to their marriage.  After marriage, on 15 October 2011 the H voluntarily assigned Property A and Property B to himself and the W as joint owners.

2.2  The Judge found the H assigned the two properties to the W as gifts.  The Judge rejected the H’s claim that the two properties should fall outside the family pool.  The H contended that Property A was not intended to be the matrimonial home.  The Judge held that this is irrelevant.  The H further contended Property B was transferred to him by his parents in contemplation or in consideration of the H having to meet his parents’ future medical and living expenses.  The Judge held the H had failed to establish his contention.

III.   Bank Accounts

3.  The bank accounts were formerly in the H’s sole name but he added the W as a joint holder after the marriage.  The Judge held that the H had failed to rebut the presumption of advancement to the W when he added the W as a joint account holder. 

IV.   Grounds of Appeal

4.  The underlying contention of the H is that it is unfair for the Judge to award 52% of the family assets to the W when the marriage only lasted 21 months and when there is no child involved.  Specifically the H advanced the following four grounds of appeal :

1)  Assets brought into a marriage would likely to be treated as non-marital and thus excluded from equal division: PW v PPTW [2015] HKFLR 213.  The Judge made no distinction between pre-marital and post-marital assets.  The source of funds in the accounts of DBS and UCO was not dealt with by the Judge;

2)  Duration of marriage is ‘potentially of great importance’.  The fact that the H has to meet the expense of his bedridden mother and other factors were not considered by the Judge;

3)  Too much weight was attached to the fact that the H did not call anyone but himself as witness.  The H’s mother at the time of the trial was paralyzed and could not attend trial;

4)  The 5% adjustment in relation to the revenue and income derived from Property A was arbitrary.

V.   Analysis

1)   Our view

5.1  We will refuse leave as we are not satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice for the appeal to be heard.

5.2  We accept on the face of it, it is unusual to award equal distribution of the family assets in such a short marriage and when there is no child involved. However the distinguishing feature in this case is that both the properties and the money in the bank accounts were found by the Judge to be owned equally by the H and W as a result of gifts made by the H to the W.  It is not a case where despite the assignment of the interest in the two properties to the W so that she becomes one of the legal owners, the actual beneficial interest of the properties remains with the H.  Likewise this is the same positon with the bank accounts.  This is clearly a finding of fact within the province of the Judge. As the Judge mentioned in his Leave Decision, the H had not sought to distinguish before him pre‑marital and post‑marital monies in the bank accounts prior to the H adding the W as a joint holder of these accounts.  In our view there is no error in dividing these assets equally as to give effect to the actual legal and beneficial interest of the parties.  The 5% adjustment in relation to Property A comes within the discretionary power of the Judge which we will not say is plainly wrong.

5.3  As stated in [7] of the Judgment below, the $3,080,000 worth of shares is the H’s assets.  The question is whether the discretion has been wrongly exercised by an equal distribution of this amount in the circumstances of this case?  We are of the view that it is not.  Included in the family pool are the W’s assets as well, albeit at a substantially lower value.  They are also equally distributed between the parties.  We are not convinced that the exercise of discretion is so plainly wrong that it calls for intervention by this Court.

5.4  There are other complaints by the H such as the Judge had not fully considered the relevant factors and erred in the assessment of evidence.  We are of the view that the H has not even come close to showing that he has a reasonable prospect of success on these grounds.

VI.   Conclusion

6.1  The application is dismissed.

6.2  We order the H to bear the costs of this application to be summarily assessed.  The W is to serve and lodge with this Court within seven days a statement of costs for summary assessment.  The H is to serve and lodge his statement of objection, if any, within seven days thereafter.  We will then consider the matter on paper.

6.3  We are of the view that the application is totally without merit.  We will, pursuant to Order 59, rule 2A(8) of the Rules of the High Court, Cap. 4A further order that the H is not allowed to apply to reconsider his application at an inter partes hearing.