HYH v. CY

FCMC14765/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 14765 OF 2010

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JUDGMENT

(Ancillary Relief)

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1.  This is a trial on the respondent wife’s application for ancillary relief against the petitioner husband.

2.  For convenience, I would refer the husband as “P” and the wife as “R”.

Background

3.  P is a Hong Kong resident and R a mainlander, with her home town in Hainan (海南).

4.  They came to know each other through the introduction of R’s relative in 2007 and thereafter they quickly married on 13 July the same year.

5.  After the marriage, they cohabitated as husband and wife together with P’s parents at a flat in Tai Po (“the matrimonial home”) which was purchased in the name of P’s parents way back in 1991.

6.  However, the marriage was a short one.  On 10 November, 2010 P petitioned for divorce on the ground of having lived apart with each other for a continuous period of at least 2 years.

7.  The petition was uncontested.  Decree Nisi was granted on 10 October, 2012.

8.  P is now 47 years old. He is still living in the matrimonial home with his parents and is working as a maxi-cab driver.  In his up-dated Form E dated 30 January, 2013, he reported earnings of about $7,500 per month.

9.  As for R, she is now 34 years old.  Before marriage, she used to work as a worker in an electronic factory in Shenzhen.  The wages of her last employment in about March, 2011 were about RMB1,500 per month.  She is now jobless and is living with her parents in Hainan.  Her plan is to return to Shenzhen for employment and to re-establish herself after the conclusion of the present proceedings.

The said Properties

10.  At first glance, given the relative young age and apparent modest means of the parties, together with the short duration of the marriage, one would never have imagined that for a case like this would have gone this far to trial.  The reason being that, as it turned out during the proceedings, R found out, through the investigation of a private defective, that P owns three properties jointly with his mother (“the said Properties”).

11.  The said Properties are Chinese style building (唐樓) (ie without elevators) in Tai Po and were purchased without any mortgage finance. Their particulars are as follows,

Date of purchase	Address	Purchase Price
15 September, 2005	Flat B, 1/F. and Flat Roof, KT House (“the KT Flat”)	$980,000
7 October, 2005	Flat E, 2/F., PK House (“the PK Flat”)	$750,000
15 May, 2006	Flat 5, 1/F., and Flat Roof, FC Building (“the FC Flat”)	$685,000

12.  Except the KT Flat, the other two flats have been partitioned into a number of rooms and rented out to different tenants.

13.  In response, P’s case is that all the purchase monies were from his mother.  He holds no beneficial interests in the said Properties and the same are beneficially owned by his mother wholly and entirely.  Due to her ill health and the fact that his mother is an ethnic Korean who does not know much of the local dialect, she reached a family arrangement with P by acquiring and holding the properties jointly with P so that he can help his mother to deal with all the tenancy matters regarding the said Properties, such as liaising with tenants, collecting rents as well as performing petty maintenance works.  The arrangement has been adopted for quite some time before the marriage.  All the rental incomes go to support his parents.

14.  R does not agree.  She maintains that apart from his income as a maxi-cab driver, P has rental income from the said Properties which are in the region of $27,300.  P’s total monthly income therefore should be at least $21,150 ($7,500 + $27,300/2 (P’s half-share of the rental income)).

Agreed Facts

15.  As it turned out during the trial, there is indeed a large measure of agreement between the parties.  R agrees that the purchase monies were from the mother and the gross and net rental income from the said Properties are $27,300 and $24,000 respectively. 

16.  As for P, in evidence, he agreed that R has to incur about $2,360 per month as her living expenses as pleaded in her Form E.  He further accepted that he has the ability to pay this monthly sum.

Factual Issues in Disputes

17.  There are 3 factual issues in dispute. 

(i)	Whether P has any beneficial interests in the said Properties.
(ii)	The length of the marriage.  The parties have dispute over when they saw the marriage as an end.
(iii)	The whereabouts of the wedding gifts.  These include a gold necklace with a jade pendant, a gold necklace with a red gemstone pendant and a gold bracelet.  P agrees that exclusive of the jade pendant, which he says belongs to his mother, the value of these wedding gifts is $22,000.

Parties’ Proposals

18.  P agrees to pay R a lump sum of $30,000 payable by 15 monthly equal instalments of $2,000 each.

19.  As for R, she has 2 alternative proposals, both come up to a total sum of $172,800.  The preferred proposal is for P to pay a lump sum of $102,000, and the balance is to be paid by monthly sums of $2,360, back-dated from July, 2011 and up to 31 January, 2014 (ie a total of 30 months).

20.  The second proposal is for P to pay a lump sum of $172,800 payable by 18 equal monthly instalments of $9,600 each.

21.  I now deal with the factual disputes.

Whether P has any beneficial interests in the said Properties

Parties’ Evidence

22.  P explained in evidence that his parents are of old age and have chronic illness, that he is merely assisting them in dealing with the rental matters such as looking for and screening of tenants, issuing demands for electricity and water charges and receipts for rentals, attending owners meetings, recording meter readings, carrying out or arranging maintenance and attending to miscellaneous matters. He emphasized that the tenants of these partitioned rooms are from the grassroots and could be difficult to handle.  They would require actually seeing the landlord in person if their rooms need repairs or maintained. The tenants would not allow persons other than the landlord to gain entry and to view the state of repairs. The said Properties are not accessible by elevators.  It would be a daunting exercise for his mother to climb up and down the stairs.  At times, he needs to claim for arrears of rentals and possession at the Lands Tribunal, and in doing so, he has to attend the Tribunal, fill out the forms, attend court hearings and liaise with bailiffs.  His mother is a Korean, aged 70 and does not read Chinese.  These duties are simply beyond her abilities.  Therefore, on the advice of an estate agent, his mother made him a joint tenant of the said Properties.  His mother clearly told him that he is not the owner.

23.  He maintained that most of the monthly rentals are deposited by the tenants into his parents’ bank accounts.  He would also receive rentals in cash occasionally but he would hand over all the receipts to parents.  He emphasised that he has no right to withdraw any money from his parents’ bank accounts and denied having received or the use of the rental incomes.  He testified that his father is 90 years old and is of frail health.  His parents rely on these rental income for their living and medical expenses. 

24.  He claimed that when he was introduced to R, on the very first occasion, he had already informed her that the said Properties, though in his name, did not belong to him.  He felt there should not be any secret about this and that was to clear any misunderstanding that he was wealthy.

25.  He also said that his intention was to have R to take over his duties in looking after the said Properties so that he could work full-time and take care of his parents.

26.  When being asked by Mr Lam, for R, as to why there is no documentation setting out the true position, P explained it is not necessary because his relationship with the mother has been good.

27.  P’s mother also gave evidence in court.  She has been living in Hong Kong for over four decades and is able to give evidence in Punti.  She confirmed that upon the advice of an estate agent whom she knew well, since P was living with her, she decided to purchase in the joint names with P for the convenience of handling the tenancy matters.

28.  As for R, it is clear that she knows very little about the transactions.  She testified that she was not aware of the particulars of the said Properties such as their locations and the amount of rental proceeds but during her stay with P, she were asked to record meter readings and to perform some cleaning up after the tenants had moved out.  She further said that during the marriage, P did not need to work because there were sufficient rental incomes for his living.  What P did at home was just checking prices of shares, funds and real properties.  She believed only part of the rental incomes were for the parents. 

The Legal Principles

29.  In Lee Tso Fong v. Kwok Wai Sun [2008] 4 HKLRD 270, where a mother purchased a flat and transferred it to the joint names of her son and daughter-in-law, and when the latter petitioned for divorce and claimed that the flat was a gift from the mother to the son and the daughter-in-law, the mother sought a declaration that she was the beneficial owner of the flat.  It was held by Deputy High Court Judge A. To (as he then was) that: 

(a)  The principle that a mother had no obligation in equity to provide for her child was outdated.  Given prevailing socio-economic conditions, the presumption of advancement applied equally to the relationship between mother and child as to father and child.  It must be presumed, in the absence of contrary evidence, that a mother who purchased property and transferred it to her child intended to gift it to the child (Dagle v Dagle (1990) 70 DLR (4th) 201, Brown & Another v Brown & Another (1993) 31 NSWLR 582 followed; Watson v Smith [1998] 3 HKC 461 distinguished; Bennet v Bennet (1878 – 79) LR 10 Ch D 474 not followed). (See paras.14 – 17) (b)  However, in general, the parent and child-in-law relationship could not create the presumption of advancement and it was not appropriate to extend the presumption to that relationship (Knight v Biss [1954] NZLR 55 distinguished). (See para.19) (c)  The presumption of advancement, which only applied to the parent and child relationship, was an exception to the primary presumption of resulting trust.  Evidence which rebutted the former presumption reinstated the latter. Thus, where a parent who purchased property and transferred it to his child sought to rely on the presumption of resulting trust, the legal burden of proof must be on the parent to rebut the presumption of advancement (Murless v Frankin (1818) 1 Swans 13, Napier v Public Trustee (WA) (1980) 55 ALJR 1 applied; Dyer v Dyer (1788) 2 Cox Eq Cas 92, Seldon v Davidson [1968] 1 WLR 1083 distinguished). (See para.25) (d)  For other relationships, in the absence of contrary evidence, the presumption of resulting trust applied and the evidential onus was on the donee to rebut the presumption of resulting trust with evidence of a contrary common intention to make a gift. In special circumstances, the parent and child-in-law relationship would be much closer than that of parent and child and in those exceptional cases, it would be for the child-in-law to prove a gift by rebutting the presumption of resulting trust. But the legal burden of proof remained on the donor. So, if the daughter-in-law in that case succeeded in discharging the evidential onus, the mother would fail, unless she could discharge the legal burden of proof by proving an express trust. (See paras.20, 23, 26)

Analysis

30.  Despite sufficient opportunities had been given to the parties to give notice to the mother and to draw her as a party, neither party did so.  The mother was merely called to give evidence on P’s behalf.  Though the mother is not a party to the present proceedings, in my view, the same principles enunciated above apply.  As has been pointed out by Deputy High Court Judge A. To in Lee Tso Fong v. Kwok Wai Sun, supra, at para. 22, “Proof rests on he who affirms, not he who denies.  It therefore lies upon the party who substantially asserts the affirmation of the issue.” Here the burden must be on P to rebut the presumption of advancement.  His case is, by virtue of the fact that the purchase monies were paid by the mother, he is merely a trustee for the mother.  There is certainly nothing in writing to support this alleged intention.  On the contrary, though only the assignment of the KT Flat has been produced, I think it should be beyond dispute that all the relevant assignments state P as one of the joint tenants and beneficial owners.  The crucial question is what the intention of the mother was at the time of the purchase. The intention is to be inferred from the acts and declarations of the parties before or at the time of the purchase or so immediately after it as to constitute part of the transaction.  They are admissible in evidence either for or against the party who did the act or made the declaration. However, subsequent acts and declarations which reflect on the intention of the parties are also admissible to the extent that they are evidence against the party who did the act or made the declaration, but not in his favour:  see Lee Tso Fong v. Kwok Wai Sun, supra, at para. 116.

31.  P tried to paint a picture that he is merely assisting his mother.  Mr Chan, for P, even termed him as merely a “manager” in relation to the said Properties. 

32.  When being cross-examined by Mr Lam, P initially acknowledged that according to his knowledge, his parents rely on the rental income of the said  Properties for their living and medical expenses.  When being asked whether there are any other sources of income, he was evasive and replied that his mother might not have told him everything.  Later on, when he was specifically asked whether or not apart from the said Properties, his mother has other properties as well, he admitted that there are also two other properties (“the Other Properties”) which were purchased in the mother’s sole name.  The first is a shop at a plaza at Tsim Sha Tsui (“the TST Shop”) which was purchased on 2 June, 2004 for $1,308,944; and the second one is a flat in WC Building, Tai Po (“the WC Flat”), purchased on 7 January, 2005 for $520,000.

33.  Naturally, P was cross-examined at some lengths on these new materials.  P admitted that as a matter of fact, he also has been assisting his mother in handling matters in relation to the Other Properties such as attending owners meetings.  

34.  The WC Flat had tenants intermittently for the past 4 years or so.  P helped his mother in looking after the tenancy matters such as accompanying her to place the property for letting, picking up the right tenants, paying management fees and dealing with minor maintenance.  He tried hard to distinguish the WC Flat from the said Properties by saying that because the WC Flat is not a partitioned flat, it is unlikely that there would be defaulting tenants lingering on without paying rents; hence, there is no need to name him as an owner.  He however admitted that his mother did not give him any written authorization on handling these matters.

35.  Little has been touched upon the TST Shop but there is nothing to suggest that P’s involvement in this property is different from that in the WC Flat, or indeed from the said Properties. 

36.  The mother admitted that the TST Shop and the WC Flat were also purchased for rental incomes.  She complained that she was annoyed by the problems she met with after the purchase. She was involved in a lot of meetings, some of which she had taken P and even R along; and she even had to make contribution to the general renovation of the building shortly after the purchase. 

37.  On the above evidence, it seems to me clear that P’s involvement in the properties, be they in the mother’s sole name or in the joint names, is no different from one another.  At one point, P admitted that making him a joint tenant would not have alleviated his mother’s trouble of having to attend court hearings in the Lands Tribunal. In my judgment, what P has been doing, in so far as the said Properties are concerned, are consistent with his status as the owner of them.  Mr Chan used the term “manager”, but according to P, his intention was to have R to relieve him from these duties.  I fail to see how a “manager” or a mere agent could appoint a successor without reference to his “boss” unless he himself is the “boss”.  Further, certainly there is no suggestion that R might be made a joint tenant once she was able to take over P’s duties.  If R could take up P’s duties without being a joint tenant, P’s explanation of “convenience” immediately falls away.

38.  I do not think it is material even if the unpleasant experience with the TST Shop and the WC Flat was one of the considerations that made the mother to come up with a decision to purchase the said Properties in joint names with P.  The mother could have had dual or multiple purposes.  It does not mean that the mother did not intend to confer ownership on P.  There could be various ways to achieve the alleged intended purpose without conferring ownership such as the granting of a Power of Attorney in favour of P or just a letter of authorisation if they cared to seek advice from their solicitors but the evidence is that the mother was contented with the suggestion of an estate agent.  P admitted he knows what a Power of Attorney is.  P further admitted that he and his mother had been explained by their solicitors and understood the nature of their ownership: he would become the sole owner upon the death of the mother.  In my view, there is nothing to indicate that the mother did not intend to confer ownership. 

39.  The objective fact is that P is the only son of the family.  He lives with the parents and takes up the duties of taking care of them.  On the evidence before me, it is beyond doubt that he has had a very close relationship with his parents.   There is no dispute that the breakdown of his marriage was due to the bad relationship between R and the mother and P chose to side with the mother.

40.  The next relevant issue is whether P has the benefit or use of the rental incomes. 

41.  Despite his insistence that all the rental incomes have gone to parents’ living and medical expenses, when being presented with the bank statements, P had to reluctantly agree that there were at least four occasions, ie on 24 January, 2010, 23 November, 2010, 21 March, 2011 and 20 May, 2011 when a tenant transferred the monthly rentals in the sum of $4,000 each into his HSBC account.  P’s explanation is that his parents did not have a HSBC bank account but Mr. Chan fairly accepted that there is no evidence of return of the monies to the parents.  This appears to be clear evidence that P has the use of the rental incomes.

42.  As for the rentals deposited into the parents’ bank accounts, I agree with Mr Lam’s submission that the parents’ bank passbook shows entries after separation only and these entries per se do not show P does not have the benefit or use of the rental incomes.  Of course, I have also borne in mind that there are also rentals that P would receive in cash. 

43.  Quite apart from the fact that there were rentals deposited into P’s bank account, on the evidence before me, I am able to come to a view that P has the benefit or use of at least some the rental incomes. 

44.  P testified that his parents, who are old and have chronic diseases, require constant care and attention.  His two younger sisters have their own families and are not living close-by, so the onus rests on him.  This, together with the need to handle the properties, has prevented him from taking up a steady full-time employment.  He could only work on casual basis, earning unstable income. 

45.  He also said that he was temporarily unemployed when he met R.  When he decided to get married, he had to take loans for the wedding.  He also worried that R might not be able to cope with the living in Hong Kong, so he decided not to look for a job and chose to stay with R, helping her to familiarize with the neighbourhood.  In about January, 2008, he purchased a used light-goods vehicle for running a transportation business.  When the vehicle required substantial repairing costs, he sold it for $9,000 in about May, 2009.  Thereafter, he worked on causal basis earning about $5,000 to $6,000 per month.  From 18 February, 2010 and 31 March, 2011, he worked in a cafeteria on a part-time basis, earning a monthly income of $3,360 per month.   He then changed to his present job as a maxi-cab driver, with about $7,500 per month.

46.  As a matter of fact, the working history that he accounted for in court is that, all along since 2002 he had been working on a casual basis only.

47.  However, in his Form E filed on 14 September, 2011 and 30 January, 2013, his monthly expenditure was stated to be $9,316 and $9,998 respectively.  His credit card and bank liabilities were said to be in the region of $69,000.  In evidence, he explained that $9,998 is the maximum amount only, and normally he needs a lesser sum.  He tried to explain that even working on a causal or part-time basis and with an unsteady income, he has still managed to keep himself afloat.  Not only that he is able to sustain himself, he has also been able to keep his liabilities, presumably from wedding and from the purchase of the vehicle, at a manageable size by paying at least the interest portions.   He even said that he has the ability to pay the monthly expenditure of R in the sum of $2,360.

48.  When P filled out his Form E, he was legally represented.  There is no reason why he should have stated the maximum amount only.  The undisputed evidence from him is that he had not been in any full-time employment since 2002, earning at its best $8,000 per month only.  His evidence that he could still manage with what meagre income he chose to tell the court is unbelievable.  I agree with Mr. Lam’s submission that it is P’s desperate attempt to resolve any questions leading to the conclusion that he must have had income other than from being a maxi-cab driver to meet with the expenditure.

49.  Further, there are no evidences or particulars as to how much the rental receipts from the properties and the expenditures of the parents are to show that P did not and does not have the use of the rental incomes.  What is before the court is the mere say-so of P that all incomes are entirely used for the benefit of the parents.

50.  For the above reasons and considering the close relationship P has with his parents and the important role he plays in the properties, the inevitable inference I can draw is that P must have the use of at least some of the rental incomes.  I do not think it is necessary for me to find that he has the use of half of the rental incomes.  In coming to this conclusion, I have already considered the fact that P has liabilities in the region of $60,000, which in my view, is neither here nor there.

51.  For the above reasons, I find that P fails to rebut the presumption.  He is one of the beneficial owners of the said Properties.

The Length of the Marriage

52.  R came to Hong Kong on the strength of a 7-day visa for getting married on 13 July, 2007.  After that, she returned to her hometown in Hainan for a Two-way Entry Permit (雙程證) which allowed her to stay in Hong Kong for 3 months.  Hence, she returned to Hong Kong in September, 2007 and stayed here for 3 months with P and his parents at the matrimonial home.  It was intended that she would have to keep on coming back and forth until she was granted a Single-way Entry Permit (單程證) by the Mainland authorities.  When the Permit expired in December, 2007, she had to return to Hainan again for another Two-way Entry Permit (雙程證).  R returned to Hong Kong for the second 3-month period in January, 2008.  When the Permit expired in April, 2008, she returned to Hainan again but she never returned since then.  She did make the application for the permit and stay in Hainan for some time but then she left for Shenzhen on about 5 June, 2008, found a job and settled there until 31 March, 2011 when she returned to Hainan to stay with her parents pending the present proceedings.

53.  There are some disputes as to who led to the breakdown of the marriage and when it broke down but there is no dispute that during her stay with P, she experienced relationship problem with P’s mother and that probably induced the breakdown of the marriage.

54.  Mr Chan, for P, argued that according to P’s evidence (which is denied by R), when R left the matrimonial home on 18 April, 2008 for the third Two-way Entry Permit, she threw the wedding ring onto the floor, indicating that she saw the marriage as an end. The relationship therefore lasted for 9 months only.  Alternatively, for the reasons that I will deal with in the later part of this judgment, Mr Chan argued that the parties saw their relationship had come to an end on 1 July, 2008, thus their relationship lasted for about one year only.

55.  In the present case, the petition for divorce was taken out on 10 November, 2010 on the ground of 2 years separation and uncontested. 

56.  Mr Lam accepted that R is estopped by reason of the divorce decree to say that separation only occurred after November, 2008 since 2 years separation is the very foundation of the decree:  see PLTO v KLK, CACV 48/2012 (date of judgment:  25 March, 2013) at paras 47-48.  For this reason, he contended that the separation only commenced as from 9 November, 2008.

57.  Thus, the parties have a difference of about 4 months only.

58.  As has been pointed out by Cheung JA in the said PLTO case, supra, the time of separation is a question of mixed fact and law: see Para. 50.

59.  On the meaning of ‘living apart’, Cheung JA in that case referred to the English authorities,

52. In Santos v. Santos [1972] 2 WLR 889 the parties, apart from short periods, had physically lived apart in England and Spain respectively. The English Court of Appeal reviewed the earlier cases and held that at 896 and 897 the phrase ‘living apart’ when used in a statute concerned with matrimonial affairs normally imports something more than mere physical separation. As to this additional element, it held that :

53.  Sachs LJ at 900 concluded that :
‘ Therefore, “living apart” referred to in grounds (d) and (e) is a state of affairs to establish which it is in the vast generality of cases arising under those heads necessary to prove something more than that the husband and wife are physically separated.  For the purposes of that vast generality, it is sufficient to say that the relevant state of affairs does not exist whilst both parties recognise the marriage as subsisting.’

60.  Further, Rayden & Jackson on Divorce and Family Matters, Vol. 1(1) (18^th Edn) has this to say at para. 9.57,

“…‘Living apart’ does not exist so long as both parties bona fide recognize the marriage relationship as continuing even though the husband and wife are separated.  The relationship does not end by reason of a separation brought about by the pressure of external circumstances such as absence on professional or business pursuits, or in search of health, or, it may be, even of pleasure.  Sexual intercourse, dwelling under the same roof, society and protection, recognition in public and in private, correspondence during separation may be regarded separately as different elements the presence or absence of which go to show more or less conclusively that the marriage relationship does or does not exist, the weight of each of these elements varying with the health, position in life, and all the circumstances of the parties…”

61.  R has produced to court some of the text messages (a total of 36) sent by P from his mobile phone from 23 April, 2007 to 16 May, 2010, a majority of them were created during the first 9 months of the marriage.  There are a couple of text messages in the end of June or early July, 2008 that throw lights on their relationship.

62.  On 30 June, 2008, P reminded R of their first marriage anniversary on 13 July, 2008 and proposed to visit R at Shenzhen on that day for celebration.  But then on 1 July, 2008, P sent her another message,

“我的媽媽永遠是我的家人是生我出來的，妳可以離開她但是我不能這樣不考 (sic)，如能這樣不考 (sic)，如果妳真的不能和我媽媽一起生活，我們分手吧好不好，我真的不想每天和家人不和，我以經很累很累！”

63.  Mr Chan contended that it is clear that P had made his choice between the mother and R and confirmed that the relationship had come to an end.

64.  Whilst I am not prepared to accept that the relationship has come to an end on 1 July, 2008, on the materials before me, I do accept that the relationship must have come to an end shortly after that.  I have borne in mind that in the present case it is more likely that there is no clear dividing line and it is a process of gradual realization that the marriage has come to an end.

65.  First, P did not go to Shenzhen to celebrate the anniversary.  There is some dispute as to how and what led to the failure of this proposed celebration but I do not consider the cause of it is material.  What is material is there was no celebration. The celebration of the 1^st Anniversary must be an important and memorable event for a newly-wedded couple.  What strike me is there was no attempt from the parties to make the proposed celebration a reality; and further, given the close proximity between Hong Kong and Shenzhen, the parties did not even make any attempt to see each other after July, 2008.

66.  Secondly, when being asked why she has deleted the text messages sent to her after July, 2008, R’s answer was that what P wrote hurt her very much.  This indicates nothing but a torn relationship.

67.  Thirdly, R kept on working in Shenzhen as usual and made no attempt to return to Hong Kong until April, 2009.  R said that she returned because she missed P.  On the other hand, P said that R was just trying to retrieve her belongings.  After R was refused entry to the matrimonial home, she called the police for assistance. In my view, if R was just trying to reconcile with P and return to her home, there was no reason why she would have chosen to take such a drastic move, risking damaging further the already torn relationship.   It is more likely that she just wanted to have her belongings back.

68.  Thus, for the above reasons, I find the parties saw their relationship had come to an end sometime after July, 2008.  I hold that the relationship lasted for approximately one year only.

The Whereabouts of the Wedding Gifts

69.  R said that when she left for a new Two-way Entry Permit in April, 2008, she left her belongings including the wedding gifts at the matrimonial home.

70.  As for P, he claimed that except the marriage ring, R had taken all the wedding gifts away after the first 3 month stay and sold them for money.  He now only has the marriage ring with him.

71.  Again, the text message by P is indicative as to who is telling the truth.  On 15 May, 2010, P wrote as follow,

“全都賣了我沒工作也要生活用錢，也交律師錢。”

72.  R testified that it was P’s reply on the whereabouts of the wedding gifts.  But for P, he explained that he was referring to his vehicle because R asked him for the vehicle as compensation. 

73.  I find P’s version utterly unbelievable.  It is contrary to commonsense and ordinary usage of word to argue that “All” (“全”) refers to a single item.  What is more, even on his own version, the “All” (“全”) had to be sold because he did not have a job.  Again, it does not make any sense because he was using his vehicle for a business and according to his evidence; he had to sell it because he was not able to afford the repairing costs, not because he did not have a job.

74.  All in all, based on the analysis that I have dealt with regarding the factual issues of disputes, I do not find P a credible witness.

75.  Mr Chan agreed that the value of the wedding gifts, excluding the jade pendant, is about $22,000, that is within the range suggested by Mr Lam.  I will take $22,000 as their value.

76.  As for the jade pendant, the mother claimed it belonged to her.  She explained that since R did not look good with her necklace without a pendant, she “lent” it to R on the wedding day for photo-shooting.  I find it hard to accept her explanation.  I consider that it was more likely a gift to R.  When being cross-examined on its value, the mother was evasive and eventually claimed that the pendant is worth something in the range of $1,000 to $5,000.  For the reason that she is minded to claim it back I doubt very much this is the case.  In her affirmation dated 20 February, 2013, R assessed that the value of the wedding gifts is in the region of $20,000 to $30,000.  With the agreement from Mr Chan that the wedding gifts excluding the jade pendant are worth $22,000, I would assess the value of all the wedding gifts including the jade pendant at $30,000. 

Jurisdiction and the Legal Principles on Ancillary Relief

77.  The jurisdiction of the court in granting financial relief for a party is governed by section 4 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”) which provides, 

“4. Financial provision for party to a marriage in cases of divorce, etc.

(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of section 25(1), make any one or more of the following orders, that is to say-

(a) an order that either party to the marriage shall make to the other such periodical payments and for such term as may be specified in the order;

(b) an order that either party to the marriage shall secure to the other to the satisfaction of the court, such periodical payments and for such term as may be so specified;

(c) an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified.

(2)    Without prejudice to the generality of subsection (1)(c), an order under this section that a party to a marriage shall pay a lump sum to the other party-

(a) may be made for the purpose of enabling that other party to meet any liabilities or expenses reasonably incurred by him or her in maintaining himself or herself or any child of the family before making an application for an order under this section;

(b) may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court.”

78.  There are also sections 6 and 6A, which for the purpose of the present application, I do not think I need to refer to.

79.  Section 7 of MPPO sets out the matters to which the court is to have regard.  Section 7 says 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.”

80.  In LKW v DD, (2010) 13 HKCFAR 537, Ribeiro PJ set out the steps to be taken by the courts in undertaking a section 7 exercise.  In brief, they are:

(i)  The ascertainment of the financial resources of each of the parties calculated as at the date of the hearing (paragraphs 71 to 73 of the Judgment);

(ii)  The assessment of the parties’ financial needs.  If the total resources are not enough to meet the parties’ needs, the s.7 exercise should stop here and there is no room to apply any sharing principle (paragraphs 74 to 79 of the Judgment);

(iii)  If surplus assets would remain after the parties’ needs have been catered for, the next step should normally be for the court to apply the sharing principle to the parties’ total assets, with a yardstick of equal division as part of that principle.  This means that the total assets should be divided equally between the parties unless there is good reason for departing from an equal division (paragraphs 80 to 82 of the Judgment);

(iv)  In considering whether good reasons exist for departing from equal division, the answer is to be found in the terms of s.7 and the implicit objective of a fair distribution of the assets.  Factors like source of the assets, conduct, financial needs, duration of the marriage, contribution to the family and compensation are all material considerations (paragraphs 83 to 130 of the Judgment); and

(v)  The weight to be given to each of the factors is a matter of discretion for the court (paragraph 131 of the Judgment).

Parties’ Financial Resources

81.  P reported his liabilities at about $69,000.  These have not been subject to serious challenge. He is effectively insolvent if his interest in the said  Properties are excluded. However, since I have already found against him, half of the value of the said Properties, which have been agreed at $2,550,000, should be included.

82.  As for R, she reported a net asset worth of $9,700 odd.  This has already taken into account the $20,000 debt she owes to her cousin for hiring a private detective.  I accept this liability is genuine.  It is clear that if it had not been for the investigation, R would not have discovered P’s assets.

83.  Leaving the said Properties aside, in view of the insubstantial amounts of P and R’s assets and liabilities, I do not think I need to take them into consideration for the purpose of the present exercise.

84.  It seems to me clear that P chooses to work part-time for his personal reasons.  Mr Chan does not object to Mr Lam’s submission that even as at now P is working part-time only as a maxi-cab driver.  I am persuaded that his earning capacity must be higher than what he is earning now.  Alternatively, since I have found that he also has the use of the rental incomes, his financial resources must be higher than $7,500.

85.  As regards P’s ability to pay, Mr Lam also relies on section 7(1)(a) of MPPO to say that I should consider the property and other financial resources which P has or is likely to have in the foreseeable future.  P is now a joint tenant and upon the demise of the mother, he would become the sole-owner.  In any event, P also agrees that he has the ability to pay R’s alleged monthly expenditure of $2,360.

Financial Needs

86.  R completed her high school education in Hainan.  After having worked in a photo shop in Hainan for some years, she saw better prospect in Shenzhen and went there for work at the end of 2006 until she got married in 2007. She had been in gainful employment in an electronic factory in Shenzhen earning about RMB1,500 from June, 2008 until 31 March, 2011.  I accept that she had to quit her job and return to Hainan for processing permits to come to Hong Kong from time to time and that have prevented her from seeking jobs in Shenzhen.  However, R is confident that after the conclusion of the present proceedings, she should be able to obtain a job in Shenzhen with wages not less than the previous one in 6 months’ time.

Departure from Equal Division

87.  For the obvious reason that the marriage is a very short one, both parties agree that there should be a departure from equal division. 

88.  In my view, this must be correct.

89.  Mr Lam made it clear at the outset of the trial that R is not claiming any beneficial interest in any of the said Properties.  In his closing submissions, he contended that given the circumstances of the case, only 10% of the value of the said Properties ought to be taken as matrimonial assets. Translated it to monetary term would mean a sum of $255,000.  On the top of this, R should also be entitled to a further sum of $15,000, being half of the value of the wedding gifts, making a total of $270,000.

90.  On the other hand, Mr Chan relies on the English case of Attar v. Attar (No. 2) [1985] FLR 653.  In that case, the marriage was for 6 months.  However, the husband was very wealthy and the wife was entitled to a readjustment period of 2 years to enable her to find employment and become self-sufficient and to re-establish herself in society.

91.  In the present case, the said Properties were independently acquired prior to the marriage from a wholly external source, ie an advancement from the mother.  They were not acquired through any joint efforts of the parties.  The parties were physically together living at the matrimonial home for a duration of 6 months only, during which, I accept, R must have some contributions to the family by way of performing household chores and cleaning some of the said Properties when tenants had left.  She seemingly also enjoyed a share of the general living expenses, which I am prepared to hold that part of them must have been supported by the rental incomes.  On the other hand, there is nothing to suggest that R enjoyed a higher standard of living while staying with P such that she had in any real sense enjoyed P’s ‘wealth’. 

92.  I also need to consider that R has been out of job and without income since April, 2011.  I accept that she needs some time, roughly about 6 months, to re-establish herself to normal life. 

93.  Another consideration which I need to take into account is according to my finding, P has retained or appropriated the wedding gifts which are worth $30,000 and which are clearly matrimonial assets.  R’s share would be $15,000.

Conclusion

94.  Considering all the circumstances of the case and taking the matters in a round, doing the best I can I am of the view that a lump sum of $90,000 is an appropriate amount.  This is to be paid by way of monthly instalments of $2,500 each. 

Orders

95.  Having carefully considered the circumstances of the case and the relevant factors in section 7 of MPPO, I order that the petitioner do pay the respondent a lump sum of $90,000 by way of monthly instalments of $2,500 each.  The first payment is to be made upon the granting of the decree absolute and thereafter on the 1^st day of each and every subsequent month until full payment.

96.  I consider that this is an appropriate case where the lump sum should be secured.  However, it would be sufficient for the payment to be secured by just one of the properties owned by P.  I therefore give an order that the lump sum payment is to be secured by the KT Flat. 

Costs

97.  As neither party has achieved what is asked for and both are legally aided, I consider the proper costs order is no order as to costs.  I shall give such a costs order nisi. The parties’ own costs are to be taxed in accordance with the Legal Aid Regulations. 

Representation