CYSL v. LYC

FCMC 8024 of 2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 8024 OF 2003

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J U D G M E N T

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1. This is an application for ancillary relief by the Petitioner (“W”) against the Respondent (“H”).

BRIEF BACKGROUND

2. H and W were married on 18^th September 1996.

3. Before the marriage, in 1995, H bought a property, which was later the matrimonial home (“Matrimonial Home”).  After the marriage, in 1997, H transferred the Matrimonial Home into the joint names of the parties.

4. There are two children of the family, who are twin daughters born on 8^th January 1998, and they are now about 7 1/2 years of age (“the Children”).

5. The parties separated on about 17^th May 1999.  W first presented a divorce petition on 17^th May 2000 (FCMC 4332 / 2000) based on the parties’ separation for one year.  As H did not give his consent, W’s petition was dismissed in June 2000.  W presented the petition in the present proceedings on 10^th July 2003, based on the parties’ separation for over two years.  A Decree Nisi of divorce was granted to W on 5^th December 2003.

PROPOSALS MADE BY H AND W

6. About 3 weeks before the commencement of the trial, on 23^rd June 2005, W’s open proposals were, inter alia, as follows :

(i)	H to pay to W HK$1.00 per annum, being nominal maintenance for W.
(ii)	H to pay W periodical payments in the sum of HK$11,000 per month for the maintenance of the Children.
(iii)	H to transfer within 2 months all H’s interest in the Matrimonial Home, subject to H’s arrangement for the discharge of the mortgage within the 2 months, and be responsible for the costs of redemption and transfer.
(iv)	H to pay W’s costs of the suit, to be taxed under the Legal Aid regulations.

7. On 11^th July 2005, H’s open proposals were, inter alia, as follows: -

(i)	H to pay W HK$1.00 per annum, being nominal maintenance for W.
(ii)	H to pay W HK$8,500 per month for the maintenance of the Children.
(iii)	H to transfer all his interest in the Matrimonial Home to W, subject to mortgage, and upon W’s undertaking to pay all mortgage or instalment loan repayment, expenses and outgoings of the Matrimonial Home from date of transfer, and all costs of transfer be shared equally; or
(iv)	Alternatively to (iii), the Matrimonial Home be sold in open market and all the net proceeds be paid to W, after repayment of the mortgage loan, and all necessary expenses and outgoings
(v)	Each party to pay his / her own costs.

8. At the commencement of the trial on 14^th July 2005, W’s proposals were : -

(i)	W no longer requires the transfer of the Matrimonial Home by H into her sole name, but asked that H to continue to pay for the mortgage of the Matrimonial Home, and to allow W and the Children to reside there until the Children reach the age of 21 or upon W’s remarriage.
(ii)	Upon the Children reaching the age of 21, and upon W’s remarriage, the Matrimonial Home be sold and the net sale proceeds be divided equally between H and W.
(iii)	H to pay HK$11,000 per month for the maintenance of the Children
(iv)	H to pay periodical payments of HK$1 per annum for the maintenance of W.
(v)	H to pay W’s costs.

9. On the 2^nd day of the trial, W changed her proposals again, and proposed as follows :

(i)	H to pay W a sum of HK$1 per annum for her maintenance.
(ii)	H to pay W a sum of HK$19,500 per month for the maintenance of the Children.
(iii)	H to make a partial payment of HK$380,000 to the mortgage loan of the Matrimonial Home within 2 months, and then transfer all his interest in the Matrimonial Home subject to the remaining mortgage loan to W solely.
(iv)	H to pay W’s costs.
(v)	H to pay the cost of the transfer of the Matrimonial Home.

ISSUES

10. The main issues in this applications include the following : -

(i)	whether W should work and her earning capacity.
(ii)	W’s alleged personal loans from a friend and former colleague Mr. Tang.
(iii)	H’s income and earning capacity
(iv)	whether H has any interest, in 2 companies, later referred to as PF Ltd. And BF Ltd in this Judgment, which H alleges are owned by his father.
(v)	whether H has any interest in a company, later referred to as G Ltd in this Judgment, which H alleges is owned by his father

THE LAW

11. The matters which this court should consider are set out in s. 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), which is as follows : -

“(1) It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A 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;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(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.

(2) Without prejudice to subsection (3), it shall be the duty of the court in deciding whether to exercise its powers under section 5, 6 or 6A in relation to a child of the family and, if so, in what manner, to have regard to all the circumstances of the case including the following matters, that is to say –

(a) the financial needs of the child;

(b) the income, earning capacity (if any), property and other financial resources of the child;

(c) any physical or mental disability of the child;

(d) the standard of living enjoyed by the family before the breakdown of the marriage;

(e) the manner in which he was being and in which the parties to the marriage expected him to be educated;

and so to exercise those powers as to place the child, so far as it is practicable and, having regard to the considerations mentioned in relation to the parties to the marriage in paragraphs (a) and (b) of subsection (1), just to do so, in the financial position in which the child would have been if the marriage had not broken down and each of those parties had properly discharged his or her financial obligations and responsibilities towards him.”

S. 7 MATTERS

12. I now turn to consider the issues, the s. 7 matters, and the parties’ evidence.

13. For the avoidance of doubt, in so far as the matters set out in this Judgment differ from the evidence of H or W, this is because I have preferred the evidence of the other party and because I consider that the documents produced confirmed my finding of fact and further I have been able to observe the demeanour of the parties.

CONDUCT OF THE PARTIES

14. The divorce petition was based on the parties’ separation.  There is no specific allegation of any “obvious and gross” conduct, or any conduct by either party, which I will need to consider.

INCOME, EARNING CAPACITY, PROPERTY AND OTHER FINANCIAL RESOURCES WHICH H AND W HAVE OR IS LIKELY TO HAVE IN THE FORESEEABLE FUTURE

Income / Earning capacity of W

15. Before the marriage, from about September 1996, W had been working as a flight attendant.  She continued working as a flight attendant after marriage, until about April 1997.  W was earning about HK$20,000 per month as a flight attendant.  W said that after marriage, H had asked her to give up working to have a baby, and she did cease working in April 1997, at H’s request, when she discovered she was pregnant.  After giving birth to the Children and until the parties separated in May 1999, W was a full time housewife and mother.  In total, she stopped working for about 2 years.

16. In May 1999, W started working again, initially in a glass factory earning about HK$15,000 per month, and she worked there for about 4 months until about September 1999.  Thereafter, she had worked over various periods of time and for a number of companies.  For about 3 months from November 1999 to about January 2000, her income was about HK$20,000 per month.  For about 3 months from about March 2000 to May 2000, her income was about HK$23,500 per month.  For about 10 months from about May 2000 to February 2001, her income was about HK$40,000 per month.  For about 14 months from about April 2001 to May 2002, her income was about HK $29,200 per month.

17. Her last two jobs before she stopped working completely in April 2003 was : -

(i)	For about 2 months from about June 2002 to August 2002, she was working as a marketing manager for a multimedia company, and her average monthly salary was HK$25,000 per month.
(ii)	For about 6 months from November 2002 to April 2003, she was employed as a business manager by another company, and her employment was terminated in April 2003.  At the time of her termination, her average monthly salary was HK$26,920 per month.
(iii)	It would appear that during the 4 years from May 1999 to April 2003, W had had about 7 jobs, some as short as 2 or 3 months, and the longest was about 14 months.  Since 2nd April 2003, W has been unemployed until the present.  She is at present receiving comprehensive social security assistance of HK$6,726 per month.

18. During the periods she was working, W had employed a domestic helper to help look after the Children.  W says her father also assisted her in taking care of the Children while she was working.  At the time of her filing her 1^st Affirmation in March 2004, W was still employing a domestic helper.  She said during the trial that she stopped employing the helper about a year before the trial.

19. When W was cross examined as to why she has not worked since April 2003, W’s explanation was that there was a economic downfall in 2003 due to SARS.  She said that she did try to find work, and had received two offers, but one required her to be based in Taiwan and the other in China.  In view of the young age of the Children, W did not accept the offers.  Also, W said her domestic helper was not looking after the Children properly, and she therefore did not want to work as she wanted to devote more time to looking after the Children, particularly when H appeared to have shown a lack of interest in their care.

20. W said that she would seek part time work in the future, but said she could only earn about HK$4,000 per month, doing part time work.

21. W is a graduate of the Chinese University of Hong Kong, with a Honours Degree in Business Administration.  During her work as a flight attendant she had undergone training in dealing with people, and also self grooming.  W plays the piano and holds a Grade 6 (Advanced Level) certificate from the Royal College of Music, but says she could only teach students if she holds a 8^th grade certificate.  She had attended secretarial training and Japanese speaking classes for some time since about 2003, after she stopped working.  W says although she can speak conversational Japanese, she is not able to work as a Japanese interpreter.  She says she has placed advertisements in supermarkets for giving piano lessons, but found no students.  H’s Counsel, Mr. Yeung suggests that if W were to work part time, she could earn about HK$8,000 per month, and that with the economy improving, she could work full time, and earn HK$25,000 per month.

22. W’s solicitor, Mr. Tsu, admits in his Final Submissions that W has earning capacity and that she may earn as much as HK$25,000 per month.  The Children were only 16 months old in May 1999, when W resumed working.  In April 2003, when W ceased working, the Children were about 5 years old.  The Children will be 8 years old in January next year.  I find that W is an intelligent woman, and very presentable and I do not understand why she should be dependent on social security.  Mr. Tsu submits that if W were to work full time, the Children would not be able to have the same level of care and attention which they would have otherwise had from their mother.  I am of the view that with the Children growing older and being enrolled in various extracurricular activities as set out later in this Judgment, they would not demand as much time of their mother as they would when they were younger, and that W should be able to work full time after the conclusion of these proceedings.  With W’s present qualifications, and looking at her previous salaries, and with the economy in Hong Kong improving greatly in the past year, I believe W should have no problem getting back into the job market.  I will take into account the fact that W had stopped full time work for over two years and I am of the view that she should be able to earn at least HK$20,000 per month initially, and may eventually earn as much as $25,000 per month or more.

W’s Property And Financial Resources

23. Apart from being a joint owner of the Matrimonial Home, W’s assets were approximately as follows : -

(i)	cash at bank :	HK$1,993.80
	HSBC savings account (6/05)
	HSBC current account (6/05)	HK$650
(ii)	various insurance policies HK$33,792.90
	(surrender value)
(iii)	MPF (6/05)	HK$ 37,283.02
(iv)	a digital piano	HK$15,000
	(purchase price was HK$50,000 in 1997)

24. W claims that she had sold her two Rolex watches, and the diamond ring which H bought for her, in 2000.

25. W claims that H owes her the following sums :

(i)	to pay the deposit of house purchase	HK$ 59,505
	(on 16th December 1997)
(ii)	for the purchase of a car on 21st May 1997	HK$150,000
(iii)	For payment of illegal football match gamble debt on behalf of H on 6th July 1998	HK$ 46,000

26. W claims that H did not deny previously that he owed her the above sums and that he was paying her interest of HK$1,000 per month from August 1998 to October 1999, based on about 4.75% return of fixed deposit interest.  In October 1999, H apparently stopped paying her the extra HK$1,000 per month, and W had asked H to repay the debt.  W says H had admitted at that time having borrowed HK$196,000 from her.  H now denies that he had borrowed the 3 debts from W.  W has produced a copy of a bank deposit slip in relation to her depositing HK$150,000 into H’s bank account on 21^st May 1997.

27. H admitted that occasionally during the marriage the parties would share their savings but said there was no intention to create any legal relationship as lender and borrower and that the extra HK$1,000 per month was only extra money he paid to W to please W.  I accept that it would be difficult to find that there had been any intention to create a legal relationship as lender and borrower between a husband and a wife particularly when their relationship was still harmonious.  W was unable to produce any documentary evidence for her alleged payments to H apart from the copy of the deposit slip for HK$150,000.  I accept that she did pay at least this amount towards the purchase of the Toyota car and this should be taken into consideration as part of her contribution towards the family.

W’s Liabilities

28. W says she owed a friend Mr. Tang a total of HK$560,400 as of May 2005.  Mr. Tang is W’s former colleague at the multimedia company she worked for two months during June 2002 to August 2002.  W claims that Mr. Tang knows her financial situation and her claims for maintenance from H, and that Mr. Tang has promised not to press her for repayment pending the outcome of her claims for maintenance.

29. When W filed her 1^st Affirmation of Means on 29^th March 2004, she said she owed Mr. Tang HK$230,900 but by the time she filed her Form E on 23^rd June 2005, she said that the debt had gone up to HK$560,400.  She said these loans were all for the expenses of her and the Children.  During the 15 month period from March 2004 to June 2005, she had increased the borrowing from Mr. Tang by about HK$330,000, averaging HK$22,000 per month.  Earlier in January 2004, she had borrowed a sum of HK$45,000 from Citic Ka Wah Bank, which she had to repay by 12 monthly sum of about HK$4,000 each, and the loan was repaid at about end of 2004.

30. Under cross examination, W admitted that there was no demand whatsoever from Mr. Tang.  The amount of HK$560,400 was made up of various “small borrowings”.  As pointed out by Mr. Yeung, Counsel for H, that W seems to have no difficulties in continuously borrowing from Mr. Tang.

31. W says the amounts were small amounts paid partly in cash and partly through her bank accounts.  W says she has kept a record of these borrowings in her computer, but did not produce a copy of her record.  She said she only started to borrow these sums from Mr. Tang after she left the multimedia company, which would be after August 2002.  There are no IOUs nor any security for these alleged loans.  W says she will have money to repay Mr. Tang when the Matrimonial Home is sold.  Also, when she starts to work part time, she can start repaying.  W agrees that there is no urgency to repay Mr. Tang.

32. I must say that W’s evidence in relation to the alleged loans totalling HK$560,400 is not at all satisfactory.  There is no evidence from Mr. Tang, and he was not called.  There is no evidence that there were any credits from Mr. Tang.  In the circumstances, I cannot accept that there is indeed a liability of HK$560,400 from W to Mr. Tang.

33. W’s estimated costs were HK$150,000, up to and including the trial, subject to legal aid regulations.

H’s Income / Earning Capacity

34. H came from a rich family.  He was educated to Form 4 level.  Since about 1987, after he partly finished Form 4, he has been working for his father in the family’s plastics business.

35. On a copy of his name card, produced by W, H is described as the General Manager of a plastics factory (referred to as “PF Ltd ” in this Judgment), which is engaged in the business of plastic moulds and / or products, taking and / or receiving orders from customers.  H is also the General Manager of another plastics factory company (referred to as “BF Ltd ” in this Judgment), which H says is responsible for the manufacturing of moulds and / products for orders referred to it by PF Ltd.

36. According to H, his father owns both PF Ltd and BF Ltd, both of which are companies incorporated in Hong Kong.  At the trial, H produced letters dated 5^th July 2005 from accountants for the companies (“R-1”) which state, inter alia, as follows: -

37. In relation to PF Ltd,

(i)	H was appointed a director of PF Ltd on 27th August 1996 and resigned as a director on 12th August 2004.
(ii)	H’s salary income from PF Ltd from 1st September 1996 to 31st May 1998 was HK$187,000.
(iii)	H’s salary income from 1st June 1998 to 31st March 1999 was HK$223,000
(iv)	Thereafter, for each of the financial years from 1st April 1999 to 31st March 2005, H’s annual salary income was HK$234,000 (namely HK$18,000 x 13 months, or on average HK$19,500 per month every year).

38. In relation to BF Ltd,

(i)	H was appointed a director of BF Ltd on 4th February 1993 and resigned on 2nd August 1993.  H was appointed a director again on 27th August 1996 and resigned on 12th August 2004.
(ii)	H’s salary income from BF Ltd from 1st September 1996 to 30th June 1997 was HK$148,000.
(iii)	H’s salary income from 1st July 1997 to 31st May 1998 was HK$178,000.
(iv)	H has not received any salary income from 1st June 1998 to 31st March 2005.

39. H says his current salary income is HK$18,000 per month from PF Ltd, plus a 13^th month extra salary.  It would appear that during the marriage, from 1^st September 1996 to 31^st May 1998, H’s salary income from PF Ltd was HK$187,000, over a period of 21 months i.e. about HK$8,904 per month, and H’s salary income from BF Ltd during the same 21 month was HK$326,000, being HK$148,000 + HK$178,000, i.e. about HK$15,524 per month.  This means a total salary income of about HK$24,428 per month during this period.  From 1^st June 1998 to 31^st March 1999, over a period of 10 months, H’s salary income was HK$223,000 from PF Ltd., i.e. about HK$22,300 per month.  There was no salary income from BF Ltd.  From April 1999 onwards, H’s salary income from PF Ltd was HK$18,000 per month x 13 months, i.e. on average HK$19,500 per month.  However, during the marriage, H was able to meet mortgage repayments of about HK$8,500 per month, to make monthly payment of HK$10,000 to W for the household expenses and for the expenses for W and the Children, to pay for other expenses of the family and himself.  H had also purchased other expensive items, such as HK$17,000 for a Rolex watch for himself in about 1996, HK$28,000 for a Rolex ladies watch for W in 1996, HK$49,000 for a diamond ring for W in 1996, and another Rolex ladies watch for W in 1997.

40. W has produced a copy of an annual charge summary of H’s American Express gold credit card which shows that the total money spent by H on this card alone was HK$208,617.96 for the 12 months from April 1996 to March 1997, which averaged about HK$17,384.75 per month.  This was in addition to the above mentioned mortgage repayments of about HK$8,500 per month and the monthly payment of HK$10,000 to W.  H claimed that he often paid for dinners for his friends dining together and paid for items bought by his friends and then received cash from them as reimbursements.  H has also said that he had bought items for the companies and his father would reimburse him afterwards.  During this 12 month period, H’s total salary income averaged about HK$24,428 per month.  Under cross examination, H admitted that during the period from April 1996 to March 1997, his father had made further payments to him, ranging from several thousands to several tens of thousands of dollars.  H had criticized W for only producing the summary for the year of the marriage and not any other years.  H was the owner of the account and he could himself have produced copies of summaries for other years if he claimed 1996 / 1997 was not a representative year but he had failed to do so.

41. At present, in addition to his reported salary income, H has the use of a Subaru car, owned by PF Ltd, with all expenses paid by the company.  There is also a Mercedes Benz owned by BF Ltd which H says he can use, but he has to ask his father’s permission first.

42. In the bank statements produced by H in relation to his bank accounts, it can be seen that there were numerous credits into and withdrawals from his bank accounts.  W had prepared a transaction record to show that the total credits in H’s two Bank of China accounts were about HK$7.2 million during a period of about 20 months from 15^th November 2001 to 16^th July 2003, before W issued the present proceedings, including the credit of H’s reported salary income of HK$17,100 per month (i.e. $18,000 per month after deducting MPF contribution of HK$900 per month).  After taking into account the monthly mortgage repayments, “POS” withdrawals, and small amounts, the total “unknown” withdrawals during this 20 month period was about HK$7 million.  Further W had also prepared a transaction record of H’s two Bank of China accounts for a period of 14 months from 17^th April 1998 to 14^th June 1999 which shows a total credit of HK$1.6 million and after taking into account the monthly mortgage payments and the HK$10,000 per month which H was paying to W at that time, the “unknown” withdrawals were about HK$1.3 million.  H does not challenge the transaction records.  During cross examination, H explained that the extra money credited into his bank accounts was money that PF Ltd had to pay suppliers in the PRC and that he was to bring to the PRC the cash for the company.  However, no vouchers, invoices or accounts were provided by H to substantiate what he said.  This was also contradictory to what H had said earlier in his 2^nd Affirmation when he claimed that the credit and debit entries were in fact items of purchase and sale of excess stocks of raw materials from PF Ltd, and that for commercial confidentiality, there was no proper documentation and further he was unable to provide the details of the transactions involved.

43. It is quite clear from the above that H had received a lot of additional money, above his reported salary income of HK$18,000 per month, and the whereabouts of such payments are unknown.  I do not find H’s explanation satisfactory and I find that H has received additional income and benefits from PF Ltd and / or BF Ltd and / or his father, other than the stated monthly amount of HK$18,000.

H’s Property And Financial Resources

44. Apart from his interest in the Matrimonial Home H says that his assets consist of :

Cash at bank as of July 2005	HK$1,464.21
A Rolex watch	HK $ 17,000
MPF at BOC-Prudential Trustee Limited	HK$110,714.63

45. PF Ltd was incorporated in Hong Kong in 1990 with a share capital of HK$800,000 divided into 80,000 shares of HK$1.00 each.  The current shareholders are two British Virgin Island (“BVI”) companies, (referred to respectively as “HP Ltd” and “WF Ltd” in this Judgment).

46. The company search of BF Ltd shows that the company was incorporated in 1993 with a share capital of HK$10,000 divided into 10,000 shares of HK$1.00 each.  The current shareholders of this company are also HP Ltd and WF Ltd.

47. From 27^th August 1996 until 12^th August 2004, H was one of the 3 directors of PF Ltd and BF Ltd, the other 2 being his father and his mother.  H admitted that he was also one of the 3 signatories authorized to sign cheques for PF Ltd and BF Ltd, the other two also being his father and his mother, and that until 12^th August 2004, he could sign singly.

48. H claims that he had no knowledge of the existence of the 2 BVI companies, although he was a shareholder of 5000 shares of BF Ltd, and the two companies were holding 5000 shares in trust for him and further these shares were transferred to him by HP Ltd. and WF Ltd on 22^nd November 1996 and on the same day, they were again transferred out to HP Ltd and WF Ltd by him.

49. Apart from PF Ltd and BF Ltd, there is another company, referred to in this Judgment as “G Ltd”.  His evidence about his knowledge of this company was vague, although again he was, from 14^th August 1992 until 12^th August 2004, one of the 3 directors of this company.  G Ltd. has a share capital of HK$600,000 divided into 600,000 shares of HK$1.00 each, of which 200,000 shares have been issued and are currently registered in the names of the same 2 BVI companies HP Ltd and WF Ltd.

50. According to various land search records provided by W, G Ltd was at the date of the search registered owner of several landed properties, including the offices currently occupied by PF Ltd and BF Ltd.

51. According to the letters from the accountants (“R-1”), it is stated that :

          Re : PF Ltd

(i) H has no shareholding either direct or indirect in PF Ltd during the period from 18^th September 1996 to 5^th July 2005.

52. Re: BF Ltd

(i)	WF Ltd, as trustee for H, transferred 1 share to H on 22nd November 1996
(ii)	HP Ltd, as trustee for H, transferred 4,999 shares to H on 22nd November 1996
(iii)	On the same day, 22nd November 1996, H transferred 1 share to WF Ltd.
(iv)	On the same day, 22nd November 1996, H transferred 4,999 shares to HP Ltd.
(v)	According to the remarks of the accountants, H had beneficially owned 5,000 shares in BF Ltd on 18th September 1996, but on 22nd November 1996, transferred all his shares to WF Ltd. and HP Ltd.

53. Re : G Ltd

(i) H has no shareholding either direct or indirect in this company from 18^th September 1996 to 5^th July 2005.

54. Re: WF Ltd (BVI company)

(i) H has no shareholding either direct or indirect in this company from 18^th September 1996 to 5^th July 2005.

55. Re : HP Ltd (BVI company)

(i) H has no shareholding either direct or indirect in this company from 18^th September 1996 to 5^th July 2005.

56. According to H, his father is a very traditional man, and that he lost favour with his father because of the breakdown of his marriage.  H says his father was upset with W seeking information about the companies.  By reason of this, he ceased to be a director of PF Ltd, BF Ltd, and G Ltd, all on 12^th August 2004, although H was a director of these 3 Hong Kong companies throughout the marriage until 12^th August 2004.  Also, H used to be able to sign cheques singly on behalf of PF Ltd and BF Ltd but now needs to sign with another director.  H has not been appointed a director of WF Ltd from 27^th March 1996 todate, and H has not been appointed a director of HP Ltd from 12^th July 1996 todate.

57. H was vague when cross examined and denies any knowledge of WF Ltd and HP Ltd or of the share transactions in BF Ltd, or of the consideration for the relevant transfers, although he was a director of BF Ltd at the time and the transfers would have required the consent of the board.  However, W did not call H’s father to give evidence, nor did she call the accountants who are a firm of certified public accountants.  Although the letters from the accountants were produced by H immediately before the trial, W could have sought an adjournment of the trial, which would give her time to call or serve a subpoena on the accountants.  She chose to proceed with the trial, and did not object to H producing the letters.  The letters were headed “To Whom It May Concern” and certify the contents in accordance with either “records and information given” to them or “documents available” to them, and “to the best of their information and belief”.  There is no reason to doubt what the accountants said in their letters.  Based on these letters from the accountants, H has had no shareholding either direct or indirect in PF Ltd, G Ltd, or the 2 BVI companies from the date of marriage i.e. 18^th September 1996 to the date of the letters, i.e. 5^th July 2005, and H has transferred all his shares in BF Ltd to the 2 BVI companies on 22^nd November 1996, although he did have beneficial interest in 5000 shares for about two months after the marriage.

58. In W’s 1^st Affirmation, apart from alleging that H had interest in the above 5 companies, she had also alleged that H had other assets, namely a property at Fiona Garden in Tuen Mun, a property at Worldwide Gardens in Shatin, a whole floor in an industrial building in Tsuen Wan consisting of 4 units, a property in Shenzhen.

59. From the land searches produced by W, the Fiona Garden property and the Worldwide Gardens property were owned by G Ltd, but according to H, both had been sold since the date of the search.  The property at the industrial building in Tsuen Wan are for the premises of PF Ltd, BF Ltd, and G Ltd.  They were purchased on in 1987 by G Ltd, and it appears that two of the 4 units were sold in April 1995.  The Shenzhen property is apparently the factory premises of the plastics companies.  There is no sufficient evidence provided by W that H has any interest in these properties.

60. W has also alleged that H’s family had investments in China for the construction and development of commercial building, and that they also own businesses, houses and cars in Vancouver.  Again, there is no evidence that H has interest in any of these investments or businesses.

H’s Liabilities

61. H claims that his liabilities are as follows :

Personal Debt to his father           HK$670,000

62. In H’s 1^st Affirmation of Means of 23^rd February 2004, he said that he had borrowed HK$670,000 from his father to pay for the down payment for the purchase and for the decoration of the Matrimonial Home.  H has produced copies of 6 cheques as evidence of his alleged debt to his father bearing the following amounts and dates : -

(i)	HK$130,000	23/1/1995
(ii)	HK$50,000	3/7/1995
(iii)	HK$ 10,000	3/7/1995
(iv)	HK$ 50,000	16/11/1995
(v)	HK$280,000	7/2/1996
(vi)	HK$ 150,000	1/2/1997
	Total: HK$ 670,000

63. There was no evidence that the above payments were loans or were in connection with the purchase of the Matrimonial Home, as W has correctly pointed out that the dates of the cheques did not match the date of the purchase of the Matrimonial Home.  Under cross examination, H said that he only borrowed about HK$400,000 for the purchase of the Matrimonial Home, but this was not supported by the above cheques as the purchase of the Matrimonial Home was completed by 10^th May 1995, and apart from the first cheque, all the other cheques were dated after the completion date.  The alleged loans were about 10 years ago.  There was no sufficient evidence to show that the above cheque payments were indeed loans.  These payments in fact support my finding that H had in the past received additional sums from his father.  H has further admitted himself in his 2^nd Affirmation that he had in the past heavily depended on his father and all his living expenses were “sourced from” his father and that he kept no personal savings.  In the circumstances, I do not accept that H is indeed indebted to his father in the sum of HK$670,000.

64. H’s estimate of costs was HK$140,000 at the time of the trial.  It is not clear how much has been paid and how much was outstanding.

Matrimonial Home

65. The Agreement for the Sale and Purchase of the Matrimonial Home was signed on 6^th April 1995, before the parties’ marriage, and the purchase was completed on 10^th May 1995.  The purchase price was HK$1.6 million.  W says that the cheques for the payment of the initial deposit in fact came from PF Ltd.  She has produced copies of two cheques to the property agent from PF Ltd bearing the following amounts and dates :

(i)	HK$50,000	24/3/1995
(ii)	HK$30,000	31/3/1995

66. Both of the above cheques were signed by H on behalf of PF Ltd.

67. On 11^th March 1997, an Agreement for Sale and Purchase of was signed by H to transfer the Matrimonial Home to H and W as joint tenants for a consideration of HK$800,000.  The transaction was completed on 11^th March 1997.  The Matrimonial Home was re-mortgaged at the time to Hua Chiao Commercial Bank for a loan of HK$1,110,000.  H has been paying for the monthly mortgage repayments since.

68. The present value of the Matrimonial Home has been agreed by both parties to be HK$1.2 million.  The present outstanding mortgage amounts to about HK$768,051.83.  The net equity is thus about HK$648,000.

PARTIES’ FINANCIAL NEEDS, OBLIGATIONS AND RESPONSIBLITIES WHICH EACH HAS OR IS LIKELY TO HAVE IN THE FORESEEABLE FUTURE

W’s Financial Needs

69. W says that the monthly expenses of her and the Children are as follows :

General :
Utilities	HK$2,800
Management	HK$888
Food	HK$3,800
Household expenses	HK$500
Sub total	HK$7,988
Personal :
Meals out of Home	HK$500
Transport	HK$750
Clothing / shoes	HK$800
Personal grooming	$500
Entertainment / presents	$400
Medical / Dental	$700
Insurance premia	$379
Contribution to parents	$1,000
Others including g festival gift, Laisees, hobbies, interests, Book, personal expenses etc Sub total HK$5,579	$550
Children :
Extra tuition fees	$4,102
(for Ballet, Chinese dance,Chinese musical instrument Physical training nowrap)
Schoolbooks and stationery	$1,002
Transport to school	$520
Medical / Dental	$733
Entertainment / presents	$1,000
Holidays	$500
Clothings / shoes	$762
Insurance premia	$1313
Lunches and pocket money	$460
Other transport	$810
Uniform	$156
Others : hair dresser	$40
Sub total	HK$11,398
Total	HK$24,965	per month

70. If W works full time, she will need to employ a domestic helper.  She previously stated that her domestic helper’s salary, including insurance and air tickets, was HK$3,404 per month.  W’s total expenses would therefore be in the region of HK$28,400 per month.

71. H has not challenged W’s expenses item by item but generally cast doubt on the amounts claimed as his counsel, Mr. Yeung submitted, these would amount to an amount of about HK$360,000 a year and a total of HK$1,440,000 from 2000 to 2004 and that it was difficult to believe how W could meet such expenses.  However, W did work and earned about HK$1,150,820 from May 1999 to April 2003 and also received a total of HK$110,000 from the monthly payment of HK$10,000 H was paying her until March 2000.  Further W said she has sold her watches and jewellery and had also borrowed HK$45,000 from Citic Ka Wah Bank in 2004.  It was common ground that during the marriage while the parties were living together, H was paying W HK$10,000 per month for the household and food expenses of 4 persons, including H himself.  Mr Yeung submitted that even taking W’s assertion that H paid for meals outside, a sum of HK$8,500 per month, as proposed by H, should be sufficient to cover all the Children’s expenses.  Further H says that HK$11,398 a month for the expenses of the Children is above the average level and that these figures were greatly enhanced after the parties’ separation.  However, I have no reason to doubt what W said was the amount of her expenses since H was not only just paying $10,000 per month to W but also he was also paying for dining out at various restaurants, which W says that they did almost 5 times in a week and he was also separately paying for other expenses for W and the Children with his credit card, which he had admitted.

72. At one stage, W has held a total of 18 credit cards.  W’s explanation was that whenever she had a job, she would apply for a new card to obtain gifts offered by the credit card companies on application.  She has recently cancelled two of her cards.  She said she mainly used her cards for purchases at Jusco Store, supermarkets and her average spending on the cards is about HK$3,000 per month.

73. Having heard what W said in her evidence, and considering all the circumstances, I accept that a reasonable amount for her General household and food expenses to be about HK$8,000 per month plus about HK$3,400 per month for the salary of a domestic helper, and a reasonable for W’s Personal expenses to be about HK$5,500 per month.  I will deal with the Children’s expenses later in this Judgment.

74. W says that she would like to continue living with the Children at the Matrimonial Home, as the Children have resided there since their birth, and also their present school is very near.  W says she would like to remain in her home as the Matrimonial Home will provide a secured roof for them.  If she has to move, she would move to a flat in the same area and the rent of a flat of similar size will be in the region of HK$4,500 per month.  She will, no doubt, have to pay a rental deposit and further incur moving expenses.

H’s Financial Needs

75. H now lives with his parents and his younger brother.  H says that his monthly expenses are as follows :

General :
Mortgage instalments	$8,493.75
Household expenses	$3,000
Sub total	HK$11,493.75
Personal :
Meals out of home	$3,000
Transport	$1,000
Clothings / shoes	$300
Entertainment / presents	$500
Holidays	$500
Medical / Dental	$300
Others : MPF	$900
	HK$6,500
Total	HK$17,993.75

76. H says he has only one credit card now, as he has cancelled his previous American Express credit card.  H claims he has to pay HK$3,000 per month to his parents as he is living with them.  This is clearly contradictory to what he said in his 2^nd Affirmation in that his living expenses were “sourced from ” from his father.

STANDARD OF LIVING ENJOYED BY THE FAMILY BEFORE THE BREAKDOWN OF THE MARRIAGE

77. During the marriage, and after the separation, until March 2000, as I have already mentioned above, H was paying W HK$10,000 per month plus about HK$8,500 per month for the mortgage repayments.  The standard enjoyed by the parties was high.  As stated above, H was able to buy W two Rolex watches and jewellery.  They were able to purchase a digital piano for HK$50,000 in 1997, to buy a car for HK$140,000, albeit W says it was her money.  As mentioned above, they would dine out frequently about 5 times a week.  H’s father was paying him extra money to spend, and all H’s clothes were designer clothes.  H has said W’s allegations in this regard are irrelevant as even if what she said were true, the luxury items were financed by his father at his will and pleasure.  However, the parties’ standard of living before the breakdown of the marriage is not irrelevant as it is a factor which I need to consider.

78. Further, apparently H’s family all managed to obtain Canadian passports in about 1997, and in about 1998 / 1999, H also sponsored W and the Children to become permanent residents of Canada.  W says none of the family members had to reside in Canada in order to meet the necessary residential requirement to obtain the passports or citizenship, as H and his father had paid large sums of money.  How H or H’s family obtained Canadian citizenship is not really relevant.  No doubt, H and / or his family can afford to pay the relevant sums.

AGE OF THE PARTIES AND DURATION OF THE MARRIAGE

79. W is now 33 years of age, and H is now 37 years of age.  Their marital relationship lasted only about 3 years, and was relatively short.

ANY PHYSICAL OR MENTAL DISABILITY OF EITHER OF THE PARTIES

80. There is no evidence of any physical or mental disability of either party.

THE CONTRIBUTIONS MADE BY EACH OF THE PARTIES TO THE WELFARE OF THE FAMILY, INCLUDING ANY CONTRIBUTION MADE BY LOOKING AFTER THE HOME OR CARING FOR THE FAMILY

81. During this short marital relationship, W had worked initially and later became a full time wife and mother after she was pregnant.  W said in her 1^st affirmation that she had cooked for the family, and did cleaning work, helped in the renovation of the Matrimonial Home from October to December 1998, in addition to bringing up the Children, who are twins.  I have no reason to doubt what W said and it is clear to me that W has made substantial contribution towards the family welfare notwithstanding that H was clearly the sole breadwinner during the marriage until the parties’ separation, and that it was through him that the parties were able to enjoy a high standard of living.  I further accepted that W had also made monetary contribution as I have accepted that she had paid for the purchase of the Toyota car in the sum of HK$150,000.

THE VALUE OF ANY BENEFIT WHICH EITHER PARTY WILL LOSE BY REASON OF THE DISSOLUTION OF THE MARRIAGE

82. W has lost the benefit of a high standard of living.

THE CHILDREN

83. The Children will be attending Primary 2 at a primary school in Tuen Mun.  They have no independent income or any financial resources, and do not suffer from any disability.  One of the matters which I need to consider under s. 7 (2) of MPPO is the manner in which the Children were being and in which the parties expected them to be educated and to place the Children, so far as it is practicable in the financial position in which the Children would have been if the marriage had not broken down and the parties had each properly discharge his or her financial obligations and responsibilities towards them.

84. The Children are attending extracurricular classes for other various activities as stated above, namely ballet, Chinese dance, Chinese musical instrument, physical training.  Had the marriage not broken down, I believe that the Children will be leading a high lifestyle, and that they would be enrolled in appropriate activities.  I am of the view that the amount of about HK$11,400 per month is a reasonable sum for their expenses.  This amount does not include their share of the General household and food expenses or the expenses of the domestic helper.

CONCLUSION

85. Although there is no evidence that H has any interest in the 5 companies, he and his younger brother are obviously the intended successors in the family business.  H’s father is wealthy and I have found that H has received from his father and / or PF Ltd and / or BF Ltd additional sums and benefits, both in terms of cash and otherwise, other than his stated salary income of HK$18,000 per month.

86. Although the parties’ marital relationship was rather short and the parties are young, W does have two young girls to look after and one of this court’s predominant concerns will be their housing needs, and W’s ongoing contribution to the care of the Children (See C v. C 1997 2 FLR 26 and B V. B 2003 2 FLR 285).  W has lived in the Matrimonial Home since the marriage, and the Children have lived there since birth.  I do not think it is reasonable to expect them to move to rented accommodation and be subjected to uncertainty caused by any fluctuation of the rental.  In the circumstances having considered all the s. 7 matters, I am of the view that H should transfer the Matrimonial Home to W subject to the present mortgage, to ensure that W and the Children have a secured roof over their heads and that there is as little disruption as possible to the Children’s lives.  This was in fact one of H’s alternative proposals on 11^th July 2005.

87. I find that W has not been able to prove that H has any interest in the 5 companies or that he has any personal assets other than disclosed.  In this case, I make no order for any lump sum as sought by W.

88. After the transfer, W’s total monthly expenses will be increased by the mortgage repayments of about HK$8,500 per month and other outgoings in relation to the property.

89. As stated above, the General household and food expenses are about HK$8,000 per month and the domestic helper’s salary would be about HK$3,400 per month.  The Children’s share of these expenses should be about 50%, which is about HK$5,700 per month.  Adding their other expenses of about HK$11,400, the total expenses for the Children would be about HK$17,000 per month.

90. Having regard to W’s earning capacity which I have found to be at least HK$20,000 per month initially, I find that she should be able to support her 50% share of General Household Expenses, i.e. $5,700 per month plus her personal expenses of HK$5,500 per month and the mortgage repayments and other related outgoings of the Matrimonial Home.  Therefore, I agree that H should only pay her a nominal maintenance payment of HK$1.00 per annum, as proposed by H, and as sought by her.

91. H was paying a total amount of about HK$18,500 per month, including the mortgage, up to March 2000.  W had in fact alleged that there was an agreement at the time of the separation that H, in addition to paying the mortgage until the Matrimonial Home is sold, will pay her HK$10,000 per month, but H apparently stopped paying the HK$10,000 per month in March 2000 at about the time when W informed him that she would be applying for a divorce.  H now denies there was such an agreement, but as in fact he did pay the HK$10,000 per month after the parties’ separation until March 2000, in addition to the mortgage repayments, I accept what W said in this respect.  As I have already found that H has received additional payments and benefits from his father and / or the companies over and above his stated salary, I am of the view that H is able to pay a sum of HK$17,000 per month for the Children, in addition to meeting his own expenses.

92. Regarding costs, as neither party can be said to have succeeded in full in their proposals, I will make an order nisi that there be no order as to costs in relation to W’s application for ancillary relief.

ORDER

93. The effect of my order is as follows :

(i)	H shall transfer to W, within one month from the date of Decree Absolute, all his interest in the Matrimonial Home, subject to the present mortgage.  All mortgage repayments and other outgoings of the Matrimonial Home, which H has been paying, shall be paid by H up until the date of transfer.  After the transfer, W shall be responsible for all these payments.
(ii)	All costs of transfer, including W’s legal costs and stamp duty, shall be paid by H.
(iii)	H shall pay W periodical payments in the nominal sum of HK$1.00 per annum for her maintenance from Decree Absolute to continue during parties’ joint lives or until W’s remarriage, whichever shall be the shorter term.
(iv)	H shall pay W periodical payments in the sum of HK$8,500 per month for the maintenance of each child, totalling HK$17,000 per month, from 1st October 2005, until such child reaches the age of 18 or completes full time education, whichever shall be the later.
(v)	There be liberty to apply in relation to the implementation of the terms of this Order.
(vi)	There be no order as to costs of and incidental to W’s application for ancillary relief, including any costs previously reserved.  This is an order nisi, and will be made absolute within 21 days.

94. Lastly, I make a declaration under s. 18 of MPPO that the arrangement for the Children are the best that can be devised in the circumstances and I give leave to W to apply for the Decree Nisi made on 5^th December 2003 to be made absolute, notwithstanding the expiration of 12 months therefrom.