|
FCMC 4140/2019
[2022] HKFC 138
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES
NO. 4140 OF 2019
_______________
| BETWEEN |
|
|
| |
TS |
Petitioner |
| |
and |
|
| |
LCW |
Respondent |
| |
and |
|
| |
TSW |
Intervener |
_______________
Coram: Deputy District Judge Susan Wong in Chambers (Not Open to Public)
Date of Application: 20 April 2022
Date of Judgment: 23 June 2022
------------------------------------
JUDGMENT
(Leave to Appeal on Disclosure)
------------------------------------
1. By virtue of a Summons dated 5 February 2021 (“the Summons”), the Petitioner Wife (W) made an application for specific discovery and production of information and/or documents against the Respondent Husband (H). After both Counsels’ oral submission, I made my verbal ruling at the end of the hearing. W is dissatisfied with my decision and seeks leave to appeal.
2. In the Summons, amongst other things, W asked H to provide:-
(a) Bank statements of 8 accounts in five banks from January 2016;
(b) Particulars of each of the transactions listed out in the “Table of Transactions” (“Table A”). For the deposits and withdrawals, H do provide the full particulars including their purposes, sources and destinations with all relevant documentary evidence in support. For the deposits and withdrawals made by way of cheques, transfers or otherwise, H do provide the names of the transferors/payors or transferees/payees and their account numbers, as well as the copies of the cheques and the relevant documentary evidence in support.
(c) estimated valuation and the audited financial statements with updated management accounts of the 2 companies, namely Happy Dance Property and Wang Yip Wealth Creation Limited;
(d) complete insurance policy documents for their estimated valuation, including but not limited to the missing pages of the insurance policy documents.
3. Regarding insurance documents as stated in paragraph (d), Mr Ng representing W submitted that H already surrendered the policy after the Summons were issued and they were therefore no longer in issue.
4. As for paragraph (b), Ms Leung representing H submitted in her Skeleton Submission that H has no objection to producing them and he will also explain the large sum transactions in Table A but will take issue with regard to W’s request for him to account for all transactions that exceed HK$10,000 in the upcoming bank statements of all the bank accounts of H from 1 January 2016 onward.
Issue
5. Apart from the question set out in the preceding paragraph, the only other issues are set out in paragraphs (a) and (c) in the Summons.
Legal Principles
6. It seems that there are no disputes in relation to the legal principles.
7. Ms Leung submitted in her Skeleton Submission as follows:-
The source of law that allows for specific discovery and production of information and/or documents in matrimonial proceedings is Rule 77(4) of the Matrimonial Causes Rules Cap 179A (“MCR”), and Order 24 rule 7 and rule 13 of the Rules of the High Court (“RHC”) which is applicable to matrimonial proceedings by virtue of rule 3 of the MCR. (paragraph 5)
8. Mr Ng then submitted in his Skeleton Submission,
The learned authors of Rayden and Jackson on Relationship Breakdown, Finances, and Children (18th Edition) also elaborated the relevant procedure for discovery in ancillary proceedings:
“…discovery begins with service of the Form E and the documents which are required to be attached to the Form E, and any other documents necessary to explain or clarify any of the information contained in the Form E…”
9. By virtue of Rule 3 of the MCR, Order 24 of the Rules of High Court is applicable to matrimonial proceedings. The governing principles are summarized in Hong Kong Civil Procedure 2021 at 24/7/2 as follows:-
12.1 A party will only be ordered to disclose documents in his possession, custody or power. If the applicant can show a prima facie case that the documents exist and relate to the matters in issue.
12.2 The Peruvian Guano test of relevance applies i.e. a document is relevant if (1) it is reasonable to suppose that it contains information which may, not must, either directly or indirectly enable the applicant to advance her own case or to damage the case of her adversary; or (2) it may fairly lead to a train of inquiry, which may have either of the above two consequences.
12.3 Once a prima facie case has been made out by the applicant, the burden shifts to the other party objecting disclosure. The Court has a discretion whether or not to order disclosure and will not order production unless it is satisfied that production is necessary either for disposing fairly of the issues between the parties or for saving costs.
12.4 Fishing is not allowed, and discovery should not be oppressive.
Discussion
10. W requested bank statements of H in respect of 8 accounts in five banks from December 2016 which is agreed to be the time of the parties’ separation.
1. Fubon Bank
11. There are two accounts in this bank. With regard to the Magicmoney account, Mr Ng submitted in his Skeleton Submission that the bank statements even though produced were incomplete with missing pages, and even with the minimum requirement to produce bank statements covering the last 12 months, the bank statements for a total of 6 months were still not yet disclosed.
12. With regard to the Passbook Savings Account, Mr Ng submitted that there is no production of any passbook record whatsoever.
13. Mr Ng also submitted that the information and documents disclosed by H failed to give an adequate answer to the questions, nor can they account for the flow of funds of various loans, and the result is that H’s version of events simply cannot be verified.
14. Mr Ng in his oral submission also drew my attention to W’s Affidavit in support of this application dated 24 February 2021 (“W’s Affidavit”) whereby W said[1],
“21. Notwithstanding that the disclosure was statutorily required by Form E and that my solicitors have further requested disclosures by way of questionnaires, the Respondent still fails to provide the following bank statements:
(a) The monthly bank statements for June 2018, July 2018, August 2018, November 2018, May 2019 and June 2019.
(b) All final pages of each of the monthly bank statements already produced.
(c) All the relevant information in respect of the passbook savings.
22. Six of the twelve months’ disclosure as a basic requirement under Form E remain missing. In addition, no single information was provided in respect of the Respondent’s passbook savings.
2. Citic Bank
15. Mr Ng submitted that the relevant pages of the statement for July 2018 and the entirety of the statement for June 2019 showing the account activities with inflows and outflows were withheld. Furthermore, Mr Ng submitted that dissipation of any sum of monies, however substantial, would not and could not be shown in the balance.
3. Public Bank
16. Mr Ng submitted in his Skeleton Submission that all the bank statements produced were incomplete with missing pages and there was no information about the account activities of the Maxi-interest Savings Account. Furthermore, the monthly statements for June 2019 of all the Public Bank accounts held by H remain undisclosed.
4. Dah Sing Bank
17. W’s Affidavit stated that the monthly statements for May 2019 and June 2019 are still missing. In addition, all the final pages of each of the monthly bank statements already produced are still missing[2].
5. Hang Seng Bank
18. W said in her Affidavit[3],
“26. In respect of the Respondent’s bank account with Hang Seng Bank, the monthly statements for (1) May 2018, (2) June 2018, (3) July 2018, (4) August 2018, (5) September 2018 (6) October 2018 (7) November 2018 (8) December 2018, (9) January 2019, (10) February 2019 and (11) June 2019 are all missing.
27. The Respondent’s disclosure was not only unsatisfactory, but also rendered it impossible for me to conduct discovery properly. Without even the basic and minimum disclosure as required by Form E, it is impossible to identify the real extent of the Respondent’s assets.
28. While I have made my disclosure in compliant with the statutory requirement, the Respondent’s rascal approach of blatantly hiding his assets – which might work in favour of himself to the detriment of our daughter and me- has left me with little faith in justice.
19. In his oral submission, Mr Ng said,
“…..our case is premised on the husband’s pattern of dissipation and substantial unexplained sum even during the period he was unemployed, and then we will have to look back at when the parties began the separation, because that’s when husband had divorce in mind, in mind. So when we view the whole thing in context, it would be necessary for the fair disposal of the AR. So the timing -- as I said earlier, the separation day, December and -- December 2016, was not disputed.
And, before that, in June 2016, your Honour can see on page 98 at paragraph 16. So husband was bound over as well because of domestic violence. Your Honour might wonder… how is this relevant? It’s the contemplation of divorce that comes into play. And also page 97 at paragraph 9, your Honour will see that shortly after 2013, which is the time when the daughter was born, then the deterioration of the relationship happened. So this again is the background.
For husband’s evidence about his occupation, the relevant evidence is in bundle A, page 149. So paragraph 1(a) it shows that husband claimed to be unemployed and ceased all the investment activities since 2018, and again this is part of the overall context, because all these unexplained transactions took place during this time, during this time when husband was unemployed without any investment activities. Then where do all these 27 million come from? Husband offered no explanation.
20. Mr Ng also pointed out that most of the answers given by H were,
“我已經忘記了確實是向誰借的，當時借錢的目的我也忘記了.”
“至於該筆款項是否還清，我也已經忘記了.”
“I cannot remember exactly from whom I borrowed the money, nor can I remember why I borrowed it.”
“Whether the sum has been paid off, I don’t recall either.” (translation)
21. Mr Ng then submitted that H repeatedly provided the same answer. Mr Ng also submitted that “H has no reason to refuse the production of, for example, the copies of the cheque, the record of the transfer, so that, at the very least, wife can identify the transferee, the payee, etc. And, without even those, how does wife begin section 17? Because the very subject matter, the very transferor or transferee, payer or payee, could not even be identified.”
22. Mr Ng in his Written Submission dated 30 March 2022 stated that Form E is only the beginning of financial discovery in matrimonial proceedings and,
“10…As remarked in Halsbury’s Laws of Hong Kong (Vol.28) at [180.446], the generally accepted obligation is to make disclosure of banking and other documentary evidence from a day 3 years before the date of petition.”
23. Ms Leung representing H objected to W’s request for copies of bank statements from December 2016.
24. Ms Leung said in her Skeleton Submission that the requested production is clearly oppressive, sweeping in scope, and is purely a fishing exercise.
25. I agree with her.
26. Mr Justice Mostyn (Mr Mostyn QC) said in Ancillary Relief: A Guide to the New Rules (Butterworth, 2000) about why judges should guard against excessive disclosure requests under the FDR Pilot Scheme. He said that copies of bank statements are cheap to obtain, but expensive to analyse:
“5.16. If the wife wants more than a year’s worth of bank statement, what is her reasoning? True, copy bank statements are cheap to obtain, but they are expensive to analyse. If there is a particular transaction, for example, the sale of a property eighteen months earlier, which the wife thinks may have been dealt with through an undisclosed bank account, then the request is not reasonable. But every request must relate to an issue and the issue must be both relevant and most importantly, proportionate in the context of the case.”
27. As Ms Leung has pointed out in her Skeleton Submission, W’s Affidavit focused only on alleged unsatisfactory disclosure in H’s Form E but failed to explain the reason why she needs to trace the bank statements 5.5 years back. Furthermore, W clearly could not explain what exactly the issue is and how bank statements over the 5.5 years could help this Court ascertain the case.
28. I agree with her submission in its entirety. W’s request is therefore disallowed.
W’s request that H should account for all transactions that exceed HK$10,000 in the existing and upcoming bank statements of all bank accounts held by H from 1 January 2016 onward:-
Table of Transactions
1. Fubon Bank Limited (account no. 860-0-xxxxxx-4):
| |
Transaction Date |
Deposit |
Withdrawal |
Remarks |
| 1. |
2018.04.23 |
2,006,482 |
|
Transfer |
| 2. |
2018.04.23 |
|
300,000 |
Cash |
| 3. |
2018.04.24 |
|
280,000 |
Cash |
| 4. |
2018.04.26 |
|
300,000 |
Cash |
| 5. |
2018.04.27 |
|
100,000 |
Cash |
| 6. |
2018.04.27 |
|
300,000 |
Cheque 366023 |
| 7. |
2018.04.28 |
|
300,000 |
Cash |
| 8. |
2018.04.30 |
|
420,000 |
Cheque 366024 |
| 9. |
2018.11.15 |
1,390,000 |
|
Transfer |
| 10. |
2018.11.15 |
|
600,000 |
Cheque 366026 |
| 11. |
2018.11.15 |
|
600,000 |
Cheque 366027 |
| 12. |
2018.12.14 |
|
150,000 |
Cheque 366028 |
| 13. |
2018.12.15 |
|
300,000 |
Cheque 366029 |
| 14. |
2019.01.22 |
3,130,000 |
|
Transfer |
| 15. |
2019.01.22 |
|
30,000 |
Cash |
| 16. |
2019.01.22 |
|
100,000 |
Cheque 366031 |
| 17. |
2019.01.22 |
|
2,697,942.09 |
Cheque 366030 |
| 18. |
2019.01.23 |
|
30,000 |
Cash |
| 19. |
2019.01.23 |
|
11,445 |
Cheque 366034 |
| 20. |
2019.01.23 |
|
14,500 |
Cash |
| 21. |
2019.06.08 |
|
50,000 |
Cash |
| 22. |
The transactions of the upcoming bank statements pursuant to §1 of the Schedule that exceed $10,000. |
2. China Citic Bank International Limited:
| |
Transaction Date |
Deposit |
Withdrawal |
Account |
Remarks |
| 1. |
2018.05.07 |
|
8,650 |
Citic (716-2-04675400) |
Cheque 000265 |
| 2. |
2018.05.15 |
18,000 |
|
Citic (716-2-04675400) |
Cash |
| 3. |
2018.05.16 |
|
25,950 |
Citic (716-2-04675400) |
Cash |
| 4. |
2018.05.29 |
1,000,000 |
|
Citic (716-2-04675400) |
Transfer |
| 5. |
2018.05.29 |
300,000 |
|
Citic (716-2-04675400) |
Transfer |
| 6. |
2018.05.29 |
|
1,300,000 |
Citic (716-2-04675400) |
Cheque 000276 |
| 7. |
2018.06.06 |
8,000 |
|
Citic (716-2-04675400) |
Cash |
| 8. |
2018.06.15 |
40,000 |
|
Citic (716-2-04675400) |
Cash |
| 9. |
2018.07.03 |
48,000 |
|
Citic (716-1-10659100) |
Cash |
| 10. |
2018.07.11 |
|
50,000 |
Citic (716-1-10659100) |
Cash |
| 11. |
2018.08.03 |
48,000 |
|
Citic (716-1-10659100) |
Cheque |
| 12. |
2018.08.06 |
|
40,000 |
Citic (716-1-10659100) |
Cash |
| 13. |
2018.09.03 |
$48,000 |
|
Citic (716-1-10659100) |
Cheque |
| 14. |
2018.08.07 |
|
9,097 |
Citic (716-2-04675400) |
Cheque 000283 |
| 15. |
2018.09.04 |
48,000 |
|
Citic (716-1-10659100) |
Cheque |
| 16. |
2018.09.07 |
|
50,000 |
Citic (716-1-10659100) |
Transfer |
| 17. |
2018.09.07 |
50,000 |
|
Citic (716-2-04675400) |
Transfer |
| 18. |
2018.09.10 |
20,000 |
|
Citic (716-2-04675400) |
Cash |
| 19. |
2018.09.10 |
|
14,753 |
Citic (716-2-04675400) |
Cheque 000294 |
| 20. |
2018.09.10 |
|
63,000 |
Citic (716-2-04675400) |
Cheque 000287 |
| 21. |
2018.11.15 |
25,000 |
|
Citic (716-2-04675400) |
Cash |
| 22. |
2018.11.16 |
|
25,000 |
Citic (716-2-04675400) |
Cheque 000299 |
| 23. |
2018.11.15 |
600,000 |
|
Citic (774-4-13256400) |
Transfer? |
| 24. |
2019.01.22 |
22,050 |
|
Citic (716-1-10659100) |
Transfer |
| 25. |
2019.01.29 |
|
9,000 |
Citic (716-2-04675400) |
Cash |
| 26. |
2019.02.18 |
|
14,329.81 |
Citic (716-1-10659100) |
Transfer |
| 27. |
2019.02.22 |
450,000 |
|
Citic (716-2-04675400) |
Cheque |
| 28. |
2019.02.22 |
|
15,000 |
Citic (716-2-04675400) |
Cash |
| 29. |
2019.03.04 |
|
100,000 |
Citic (716-2-04675400) |
Cash |
| 30. |
2019.03.14 |
|
100,000 |
Citic (716-2-04675400) |
Cash |
| 31. |
2019.03.14 |
|
20,000 |
Citic (716-2-04675400) |
Transfer |
| 32. |
2019.03.14 |
20,000 |
|
Citic (716-1-10659100) |
Transfer |
| 33. |
2019.03.15 |
600,000 |
|
Citic (716-2-04675400) |
Transfer |
| 34. |
2019.03.18 |
|
14,329.81 |
Chic (716-1-10659100) |
Transfer |
| 35. |
2019.03.20 |
|
100,000 |
Citic (716-2-04675400) |
Cash |
| 36. |
2019.04.04 |
|
100,000 |
Citic (716-2-04675400) |
Cash |
| 37. |
2019.04.08 |
|
15,000 |
Citic (716-2-04675400) |
Cheque 000310 |
| 38. |
2019.04.09 |
|
14,277 |
Citic (716-2-04675400) |
Cheque 000312 |
| 39. |
2019.04.12 |
|
80,000 |
Citic (716-2-04675400) |
Cash |
| 40. |
2019.04.17 |
|
90,000 |
Citic (716-2-04675400) |
Cash |
| 41. |
2019.04.18 |
|
14,324.24 |
Citic (716-1-10659100) |
Transfer |
| 42. |
2019.04.25 |
|
100,000 |
Citic (716-2-04675400) |
Cash |
| 43. |
2019.04.25 |
10,000 |
|
Citic (716-1-10659100) |
Cash |
| 44. |
2019.05.07 |
|
80,000 |
Citic (716-2-04675400) |
Cash |
| 45. |
2019.05.14 |
|
24,098 |
Citic (716-2-04675400) |
Cheque 000321 |
| 46. |
2019.05.14 |
|
30,000 |
Citic (716-2-04675400) |
Cheque 000320 |
| 47. |
2019.05.20 |
|
14,324.24 |
Citic (716-1-10659100) |
Transfer |
| 48. |
2019.05.22 |
10,000 |
|
Citic (716-1-10659100) |
Cash |
| 49. |
2019.05.22 |
|
50,000 |
Citic (716-2-04675400) |
Cash |
| 50. |
2019.05.27 |
|
50,000 |
Citic (716-2-04675400) |
Cash |
| 51. |
The transactions of the upcoming bank statements pursuant to §1 of the Schedule that exceed $10,000. |
3. Public Bank (HongKong) Limited:
| |
Transaction Date |
Deposit |
Withdrawal |
Account |
Remarks |
| 1. |
2018.05.11 |
|
14,689 |
Public (0713-219025-001) |
Cheque 682389 |
| 2. |
2018.05.29 |
50,000 |
|
Public (0713-219025-001) |
Cash |
| 3. |
2018.05.29 |
20,000 |
|
Public (0713-219025-001) |
Cash |
| 4. |
2018.05.29 |
|
30,000 |
Public (0713-219025-001) |
Cash |
| 5. |
2018.05.31 |
|
35,360 |
Public (0713-219025-001) |
Cheque 682397 |
| 6. |
2018.07.05 |
10,000 |
|
Public (0713-219025-001) |
Cash |
| 7. |
2018.07.05 |
24,000 |
|
Public (0713-219025-228) |
Cash |
| 8. |
2018.07.17 |
|
8,500 |
Public (0713-219025-001) |
Cheque 682400 |
| 9. |
2018.07.19 |
|
20,000 |
Public (0713-219025-228) |
Cash |
| 10. |
2018.07.30 |
|
14,625.32 |
Public (0713-219025-228) |
Transfer |
| 11. |
2018.08.02 |
58,000 |
|
Public (0713-219025-228) |
Cheque |
| 12. |
2018.08.02 |
|
10,000 |
Public (0713-219025-228) |
Cash |
| 13. |
2018.08.06 |
|
40,000 |
Public (0713-219025-228) |
Cash |
| 14. |
2018.08.29 |
12,000 |
|
Public (0713-219025-228) |
Cheque |
| 15. |
2018.08.29 |
|
10,000 |
Public (0713- 219025-228) |
Cash |
| 16. |
2018.09.13 |
25,000 |
|
Public (0713-219025-228) |
Cash |
| 17. |
2018.09.17 |
|
30,428.57 |
Public (0713-219025-228) |
Transfer |
| 18. |
2018.10.02 |
|
10,000 |
Public (0713-219025-001) |
Cash |
| 19. |
2018.10.02 |
12,000 |
|
Public (0713-219025-228) |
Cheque |
| 20. |
2018.10.16 |
967,000 |
|
Public (0713-219025-001) |
Cheque |
| 21. |
2018.10.18 |
|
310,000 |
Public (0713-219025-001) |
Cash |
| 22. |
2018.10.19 |
|
200,000 |
Public (0713-219025-001) |
Cash |
| 23. |
2018.10.19 |
|
54,000 |
Public (0713-219025-001) |
Cheque 682404 |
| 24. |
2018.10.20 |
|
200,000 |
Public (0713-219025-001) |
Cash |
| 25. |
2018.10.22 |
|
13,114 |
Public (0713-219025-001) |
Cheque 682405 |
| 26. |
2018.11.09 |
|
13,521 |
Public (0713-219025-001) |
Cheque 682409 |
| 27. |
2018.11.13 |
|
43,487 |
Public (0713-219025-001) |
Cheque 682424 |
| 28. |
2018.11.23 |
|
10,000 |
Public (0713-219025-001) |
Cheque 682425 |
| 29. |
2018.11.23 |
|
11,000 |
Public (0713-219025-001) |
Cheque 682426 |
| 30. |
2018.11.27 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682411 |
| 31. |
2018.12.08 |
10,000 |
|
Public (0713-219025-228) |
Transfer |
| 32. |
2018.12.17 |
|
20,008 |
Public (0713-219025-228) |
Transfer |
| 33. |
2018.12.27 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682412 |
| 34. |
2019.01.08 |
|
11,856 |
Public (0713-219025-001) |
Cheque 682432 |
| 35. |
2019.01.14 |
|
10,000 |
Public (0713-219025-001) |
Cheque 682433 |
| 36. |
2019.01.28 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682413 |
| 37. |
2019.02.27 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682414 |
| 38. |
2019.03.04 |
10,000 |
|
Public (0713-219025-001) |
Cash |
| 39. |
2019.03.28 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682415 |
| 40. |
2019.04.04 |
10,000 |
|
Public (0713-219025-001) |
Cash |
| 41. |
2019.04.26 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682416 |
| 42. |
2019.05.27 |
|
9,000 |
Public (0713-219025-001) |
Cheque 682417 |
| 43. |
2019.09.06 |
30.000 |
|
Public (0713-219025-228) |
Cash |
| 44. |
2019.09.16 |
|
30.434.65 |
Public (0713-219025-228) |
Transfer |
| 45. |
The transactions of the upcoming bank statements pursuant to §1 of the Schedule that exceed $10,000. |
4. Dah SangBank Limited (09-388-xxxx-7)
| |
Transaction Date |
Deposit |
Withdrawal |
Account |
Remarks |
| 1. |
2018.07.11 |
146,000 |
|
DSB (09-388-3083-7) |
Cheque |
| 2. |
2018.07.13 |
|
100,000 |
DSB (09-388-3083-7) |
Cash |
| 3. |
2018.07.13 |
|
26,546 |
DSB (09-388-3083-7) |
Cheque 000044 |
| 4. |
2018.07.16 |
50,000 |
|
DSB (09-388-3083-7) |
Cheque |
| 5. |
2018.08.09 |
|
30,000 |
DSB (09-388-3083-7) |
Cash |
| 6. |
2018.09.04 |
|
20,000 |
DSB (09-388-3083-7) |
Cash |
| 7. |
2018.10.09 |
|
13,968 |
DSB (09-388-3083-7) |
Cheque 000046 |
| 8. |
2019.02.15 |
603,024.7 |
|
DSB (09-388-3083-7) |
Transfer |
| 9. |
2019.02.15 |
|
50,000 |
DSB (09-388-3083-7) |
Cash |
| 10. |
2019.02.15 |
|
19,200 |
DSB (09-388-3083-7) |
Cheque 000048 |
| 11. |
2019.02.19 |
|
100,000 |
DSB (09-388-3083-7) |
Cash |
| 12. |
2019.02.22 |
|
450,000 |
DSB (09-388-3083-7) |
Cheque 000050 |
| 13. |
2019.02.23 |
19,000 |
|
DSB (09-388-3083-7) |
Cash |
| 14. |
2019.02.25 |
20,000 |
|
DSB (09-388-3083-7) |
Cash |
| 15. |
The transactions of the upcoming bank statements pursuant to §1 of the Schedule that exceed $10,000. |
5. Hang Seng Bank Limited (Account No: 287-9-xxxxxx)
| |
Transaction Date |
Deposit |
Withdrawal |
Account |
Remarks |
| 1. |
2018.09.07 |
1,475,100 |
|
Hang Seng (287-9-xxxxxx) |
Transfer |
| 2. |
2018.09.07 |
|
1,380,000 |
Hang Seng (287-9-xxxxxx) |
C. Order |
| 3. |
2018.09.07 |
|
95,050 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 4. |
2018.10.22 |
107,500 |
|
Hang Seng (287-9-xxxxxx) |
Cheque |
| 5. |
2018.10.24 |
|
100,000 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 6. |
2018.12.17 |
80,000 |
|
Hang Seng (287-9-xxxxxx) |
Cheque |
| 7. |
2018.12.17 |
20,000 |
|
Hang Seng (287-9-xxxxxx) |
Cheque |
| 8. |
2018.12.24 |
|
10,000 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 9. |
2018.12.29 |
|
48,200 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 10. |
2019.01.02 |
80,000 |
|
Hang Seng (287-9-xxxxxx) |
Cheque |
| 11. |
2019.01.04 |
20,000 |
|
Hang Seng (287-9-xxxxxx) |
Cheque |
| 12. |
2019.01.05 |
|
50,000 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 13. |
2019.01.17 |
|
50,000 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 14. |
2019.01.28 |
|
45,000 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 15. |
2019.02.04 |
80,000 |
|
Hang Seng (287-9-xxxxxx) |
Cheque |
| 16. |
2019.04.26 |
|
80,000 |
Hang Seng (287-9-xxxxxx) |
Cash |
| 17. |
The transactions of the upcoming bank statements pursuant to §1 of the Schedule that exceed $10,000. |
29. Mr Ng pointed out that according to H, he had been unemployed and had ceased all investment activities since 2018, and yet, all these unexplained transactions took place during this time.
30. Mr Ng in his Skeleton Submission said,
29. The unexplained substantial transactions are alarming as tellingly shown in Table A of the Summons. This is especially so when transactions in Table A are only the tip of the iceberg. As demonstrated above, H’s existing disclosure is far below the bare minimum as required by the Form E.
30. In assessing necessity and fairness, the transactions in Table A must also be viewed in the context of the amounts against the exceptionally limited scope. Although there are about 150 items in Table A, some of the transactions took place on the same dates. In all, Table A reflects only about 90 days with transactions.
31. However, the total amounts of deposits and withdrawals over these 90 days with transactions reach $13,782,157 and $13,183,782 respectively.
32. The substantial transactions with $13,782,157 and $13,183,7836 deposits and withdrawals took place in about 1-year only – and representing a part only with many of the bank statements remain hidden.
33. Nevertheless, the absurdity in H’s disclosure ought to be viewed in light of H’s own evidence with respect to these transactions. When asked about their purposes, destinations and sources, H’s reply along the line that he forgot about them (e.g. 我真的忘記了) appeared for more than 40 times in H’s 2nd Answer.
34. In essence, H alleged to have forgotten about each and every transaction that except for the 3 items as set out in the table at 7 above that would not adversely affect ancillary relief against himself. Worse still, Husband was repeatedly unable to recall even deposits and withdrawals of more than a million within a few days in the absence of any employment or business throughout.
31. Ms Leung on the other hand said that as for those listed out in Table A, H is willing to ask for copies from the banks if they were cheques but not cash. For those listed out in Table A covering the 12-month period mandated by Form E, H is willing to provide the missing pages.
32. Ms Leung submitted in her Skeleton Submission[4],
(a) ….. W’s supporting affidavit contains literally nothing that justify her request. H submits again that W has failed to satisfy the burden of proof to prove relevance and necessity for disclosure and/or production of information and/or documents for 5.5 years, i.e. from 1st January 2016 up to date.
(b) W has failed to explain how the benchmark of $10,000 is set. It is W’s own case that H “made considerable profits from his property investments. If so, transactions at or slight above $10,000 are relatively trivial among H’s property investment practice. If going along with W’s case, discovery on such trivial sums is wholly disproportionate in the alleged context of the pool of H’s assets;
(c) The absurdity and incomplete disclosure in H’s Answer in relation to the transactions submitted by W’s learned Counsel in his skeleton can at most be a submission point on H’s credibility. It is a matter to be considered by this Court in the final ancillary relief trial. However, this surely is not a justification to seek discovery and/or production in such a wide scope; and
(d) If H is to provide account for each and every transaction over HK$10,000 from 1st January 2016 up to date, extensive amount of time will be needed to organize such disclosure….this Court will ultimately be deluged with an immense amount of information that is not necessarily relevant and significant. This, again, obviously contravenes…the objectives of our civil litigation system to save costs and increase cost-effectiveness.”
33. Ms Leung submitted that it is clearly irrelevant, unnecessary and oppressive.
34. I agree.
35. In the Submission of H’s solicitors[5], it states,
"(W) also made allegations about huge unexplained transactions in respect of bank accounts held by (H). But if we care to do a little bit arithmetic, we can see that the Deposits and Withdrawals under those accounts basically balance out each other. In other words, there is no evidence nor even any hint of dissipation of assets.”
36. I share their view. It is obvious from Table A that the ‘in and out’ entries do not indicate any dissipation of assets. If H is willing to explain the large sum transactions in Table A, W’s request for H to provide and account for each and every transaction over HK$10,000 is not allowed. As for W’s request that the period should commence in January 2016, I have already stated my reason for refusal and do not wish to repeat it here.
The estimated valuation and audited financial statements with updated management accounts of the 2 companies, namely Happy Dance Property and Wang Yip Wealth Creation Limited (“the two companies”):
37. Mr Ng submitted that H concealed his 100% shares in Wang Yip and that H claimed not to know anything about the business and properties held by Wang Yip since he did not take part in any of its business.
38. In his Skeleton Submission, Mr Ng submitted that;
“35.2 It was also H’s own evidence that he had no shareholding or beneficial interest in any company and that there was no change in that for the 36 months prior to June 2019 i.e. since June 2016.
35.3 However, it was discovered that H had in fact transferred his shareholding in Wang Yip to one Ms Tong on 13/8/2018.
35.4 Upon W’s follow-up request for H to produce the relevant audited financial statements in Wang Yip and Happy Dance, H’s directorship was then immediately terminated on 30/10/2020.
35.5 On the other hand, H also alleged that he had not participated in any operation or business in both Wang Yip and Happy Dance.
35.6 However, as shown from the records in the Company Registry, H was in fact (1) the sole founder member; (2) the sole shareholder; and (3) the sole director of Wang Yip when it was incorporated in 2017;
35.7 H was the one-and-only person running Wang Yip since its incorporation. This had been the case until all his shareholding was transferred to Ms Tong in late 2018 – and only around that time Ms Tong first became the director.
35.8 The incoherence of H’s allegations does not end there and then. It was H’s own evidence that there was no valuation or negotiation whatsoever for his transfer of the 100% shares in Wang Yip to Ms Tong.”
39. Mr Ng then submitted that if H had not received any money for the transfer because the sale proceeds had been offset by the debts owed to Ms Tong, he would like to know to what extent the debts had been offset?
40. Ms Leung on the other hand submitted that H is not in possession, custody and power of the required documents of the 2 companies Happy Dance Property and Wang Yip Wealth Creation Limited.
41. Ms Leung submitted in her Skeleton Submission,
“24. H had already explained in his Answer to W’s 1st Questionnaire and Answers to W’s 2nd Questionnaire, that H was a director of Happy Dance Property and Wang Yip Wealth Creation Limited in name only. H did not participate in the operation and decision-making of Happy Dance Property and Wang Yip Wealth Creation Limited. As such, H indeed does not have possession, custody and power over the 2 companies’ audited financial statements and management accounts.”
42. In her oral submission, Ms Leung said that H only held those companies in name and he had also ceased to be shareholder of Wang Yip. Ms Leung further submitted that H had tried to approach the two companies to obtain the documents requested by W but the companies refused to provide anything and immediately terminated H’s directorship.
43. The two companies’ replies were attached to W’s Affidavit sworn on 27 January 2021[6].
44. Ms Leung therefore submitted that those documents are the two companies’ property of which H does not have possession.
45. Ms Leung cited B v B (Matrimonial Proceedings: Discovery) [1978] Fam. 181 to demonstrate that the two companies are not the alter ego of H, and that as a result, he is not in position to control them to such an extent as to require production of those documents.
My view
46. I agree with Mr Ng when he submitted that this application is premised on Order 24 Rule 7 whereby I am empowered to “make an order requiring H to make an affidavit stating whether any document specified or described in the application or any class of document so specified or described is, or has at any time been, in his possession, custody or power, and if not then in his possession, custody or power when he parted with it and what has become of it.”
47. Given H’s previous position in the two companies, I see no reason why he should not do so.
Costs
48. As I have made some rulings in favour of W and some in favour of H, I make no order as to costs with Certificate of Counsel.
Mr Caspar Ng , instructed by Messrs Raymond T.M. Lau & Co. for the Petitioner
Ms Clare Leung, instructed by Messrs Collin Ng & Co. for the Respondent
Messrs Damien Shea & Co. for the Intervener
Leave to appeal
Applicable legal principles
49. Section 63A(2) of the District Court Ordinance provides that leave to appeal shall not be granted unless the intended appeal has a reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard.
50. The relevant test of whether an appeal has a reasonable prospect of success is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal. A reasonable prospect of success therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable” (See: SMSE v KL [2009] 4 HKLRD 125; KNM v HTF, HCMP 288/2011).
51. Under Order 58 rule 2(4) of the Rules of the District Court, Cap 336H, an application for leave to appeal from an interlocutory judgment, order or decision should be made within 14 days from the date of that judgment, order or decision, whereas an application for leave to appeal from a non-interlocutory judgment, order or decision should be made within 28 days from the date of that judgment, order or decision.
52. On 30 March 2022, W asked for leave to appeal. W’s application is made out of time.
53. The court has a discretion to grant leave to appeal out of time. The factors for consideration are:
(1) The length of delay;
(2) The reason(s) for delay;
(3) Prospect of success of the intended appeal application;
(4) Whether the grant of leave to appeal out of time would cause prejudice to the opposite party.
54. As I have already said in Paragraph 1 of this Judgment that I made the verbal ruling after both Counsel’s oral submission at the end of the hearing and Mr Ng obviously misunderstood that I would hand down a written judgment and therefore did not file Notice of Appeal within the time limit. As H made no objection to W’s application, I would grant leave for H to appeal my ruling out of time.
55. In Mr Ng’s Written Submission dated 30 March 2022, Mr Ng submitted,
“6. In the context of matrimonial proceedings for ancillary relief, it is trite that a party has a duty to make full and frank disclosure of his means and assets. As Coleridge J put it in J v V [2004] 1 FLR 1042 at P130, “all cards must be put on the table face up at the earliest stage if huge costs bills are to be avoided”…In B v B [1978] 1 All ER 801 at P10A, Dunn J noted that a wife is unlikely to know the details of the husband’s sources of wealth or precise figures, and “Applications for such discovery cannot be described as fishing for information, as they might be in other divisions. The wife is entitled to go fishing in the Family Division within the limits of the law and practice.”
7. Moreover, W’s application here is not and cannot be described as “a fishing expedition in the sense of casting a line in the hope that something would be caught. The fish had been identified and the court was endeavouring to spear it” : Zakay v Zakay [1998] 3 FCR 35.
56. With respect, I disagree and in particular, I disagree that “the fish had been identified”. I repeat paragraph 26 of this Judgment.
57. Mr Ng in his Written Submission also submitted,
“11. To assess the parties’ income and wealth in a case where there are serious issues concerning a party’s adequacy of disclosure plainly requires disclosure of bank statements for more than the starting point of 12 months.
12…..W would contend on appeal that in a big money case where there are serious dispute over the adequacy of a party’s disclosure, a fortiori, where there are serious disputes over the ownership of assets and the propriety of substantial dispositions, it is necessary for the fair disposal of the cause or matter that there should be a longer period of disclosure.
13. The start date for financial disclosure is particularly important where, as in the present case, the parties had already separated before the Petition and H was aware of the dangers of W’s claims against him. On evidence, the parties had separated for about 3 years before the Petition since W reported H’s persistent assaults on W that led to H’s admission at Kowloon City Magistrates’ Courts in about June 2016.”
58. With respect, I disagree. In H’s Skeleton Submission, Ms Leung submitted,
“14…..R submits that the alleged unsatisfactory disclosure through his Form E does not automatically justify P to seek discovery and production of the bank statements that are outside the 12-month period mandated by Form E. P still bears the burden to prove that bank statements from 1st January 2016 up to date are relevant to the issues of this case and are necessary for fair disposal of this cause or matter, or for saving costs.”
59. I agree in its entirety.
60. Mr Ng also submitted in his Written Submission,
“14. …H was found to have substantial outflows and dissipations after the parties separated and shortly before the Petition for which he could not explain himself. Even with the few bank statements that H was willing to produce, H’s unexplained transactions already amounted to the tune of $27M – a few months before the Petition and on bank transactions alone.
16. Those H selected not to produce have been concealed in his Form E since the beginning. There was no explanation why H insists on hiding those from the beginning but not those disclosed. There were most likely to have been outflows and dissipations much more than HK$27M – even on account of the 1 year before the Petition only and on bank transactions alone.
21. However, it was found that H bought a property at HK$5,300,000 in 2018 situated at…Temple Street, Kowloon on behalf of Wang Yip and only a few months before the Petition. It is noteworthy that H is still hiding many bank statements in 2018, and H could not explain (or “forgot about”) the substantial outflows and dissipations from his banks about the same time.”
61. In this respect, I agree with what Ms Leung submitted in her Skeleton Submission,
“15(a) why 1st January 2016? P never explains why and how bank statements starting from 1st January 2016 are relevant. The starting point of 1st January 2016 is arbitrarily defined without justification;
(b) P in her supporting affidavit focuses only on the alleged unsatisfactory disclosure in R’s Form E…P never explains the reason why she needs to trace the bank statements 5.5 years back; and
(c)what exactly is the issue in this case; and what exactly can the bank statements for 5.5 years help this Court to ascertain? P alleged that R is hiding assets.., but what are there that R is trying to hide? His wanton and extravagant spending? A particular undervalued transaction? Or just simple non-disclosure of his assets that P may know generally but not the details thereof? R submits that P must first identify the issue in order to prove relevance. By alleging generally that R is hiding asset without trimming it down is not enough to satisfy the burden to prove relevance and necessity.”
62. I agree in its entirety.
63. Mr Ng also submitted in his Written Submission,
“18. More significantly, it was discovered that H owns a land property bought at HK$8.500,000 in 2015 situated at ….Liberal Factory Building. This was kept in the dark by H completely.
19. In the meantime, it was found that H has already disposed at least 12 properties held under his name shortly before the Petition. These 12 land properties are all situated in Hong Kong – and the sale proceeds for one of them alone could amount to HK$16.8M. However, these were all kept in the dark by H completely.”
64. In my view, what are the issues in relation to Mr Ng’s submission again?
65. With the reasons given, I do not see that W has a real prospect of success in the appeal. I also failed to see any other reasons in the interest of justice why the appeal should be heard. I refuse to exercise my discretion to grant leave of appeal to W.
Costs
66. I fail to see why costs should not follow the event. I therefore make an order nisi that W do pay H costs of the summons and such costs order nisi be made absolute if no application is made by any party to vary the same within 14 days.
|
(Susan Wong)
Deputy District Judge |
Mr Caspar Ng , instructed by Messrs Raymond T.M. Lau & Co. for the Petitioner
Messrs Collin Ng & Co. for the Respondent
Messrs Damien Shea & Co. for the Intervener
[1] Bundle A page 99
[2] Bundle A Page 100 paragraph 25
[3] Bundle A Page 100 Paragraph 36 – 38
[4] paragraph 21
[5] Bundle A page 108
[6] Bundle C page 562
|