MKKWH v. RKSH

CACV 197/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 197 OF 2012

(ON APPEAL FROM HCMC 9 OF 2010)

____________

____________

________________________

D E C I S I O N

________________________

Stay of execution of judgment

1. Deputy High Court Judge Carlson ordered the matrimonial assets of the parties to be divided equally between the petitioner wife (‘wife’) and the respondent husband (‘husband’).  The wife has lodged an appeal against the judgment which will be heard on 20 June 2013.  The wife now applies for a stay of execution of the judgment.

Principle

2. At this stage of the proceedings unless the wife can show that she has such a strong meritorious appeal that justice requires the judgment to be stayed, the applicable principle in granting a stay is that she has to show that she has an arguable appeal and the appeal will be rendered nugatory if the judgment is not stayed.

Arguable appeal

3. In my view the wife has an arguable appeal on at least two matters.  First, in respect of the factual errors in the judgment on the husband’s extra-marital relationships, his children born out of the relationships and the amount of money spent by the husband on these relationships.  This affects the issue whether the money spent should be taken into account when assessing the joint assets of the parties or whether there should be a departure from the equal sharing principle.  Although counsel for the wife at the trial (not Mr. Leung who only appeared at this application) conceded that there was no recklessness on the part of the husband, he had maintained that the spending by the husband was a relevant factor to be taken into account.

4.  The other matter is in respect of the relief granted by the Judge.  He allowed the husband to have a first choice from the collection of antiques to the value of $78 million before equal physical distribution of the antiques to the parties.  The total value of the antiques is about $780 million and the antiques constituted the bulk of the parties’ assets of $1 billion.  The husband is allowed to select first because the wife had failed to account for 27 items of the antiques valued at $78 million.  The appropriateness of the method is clearly an arguable point on appeal.  For a start, it did not take into account the value of the individual items ‘removed’ by the wife.  Although the husband has chosen less items, the 18 items now chosen by him have the equivalent value of $78 million.  Whereas a substantial part of the wife’s ‘removed’ antiques has a lower value, most of the antiques now chosen by the husband are high value items.  The stipulated $78 million value is achieved by the husband by the inclusion of four lower value items which averaged out the overall value.  Arguably a fairer way of selection is to require the husband to select the pieces by reference to equivalent items of similar value in respect of those removed by the wife.  Otherwise, as it is now, the husband has the advantage of selecting the more valuable pieces first.  Further, the ‘average’ price of each item may not be an appropriate guide because of the huge disparity in price of some items assessed by the three auction houses.  At the moment, the ground of appeal pleaded by the wife on this point is about the decreased value of the antiques if they were to be disposed of separately and not as a set and the sentimental value she attaches to the items now chosen by the husband.  The wife has collected the items over the past 20 to 30 years and they have been used by her at her home and viewed regularly by special interest groups such as Friends of the Hong Kong Museum of Art, Asia Society, Hong Kong University Museum Society, collectors and auction houses.  I do not see why the wife has to be confined only to this pleaded ground when her objection is really to the method used in the distribution.

5. Further in respect of the relief, there must also be an arguable appeal on the time given to by the husband to pay for the wife’s shares in the listed company.

Appeal will be rendered nugatory

6. I am satisfied that the appeal will be rendered nugatory if execution is not stayed.  Once the antiques are disposed of in the market (by way of auction, according to the husband) then they cannot be recovered.  As to the possibility of adjustment in the final monetary sums, I am not sure that this is really the ideal solution.  The wife has actually suggested below that she would prefer to exchange her shares for the antiques. 

7. In terms of prejudice to the husband, he receives an annual income of $4 million which is by no means a small sum.  It is argued that any delay in the execution of the judgment may affect the husband’s plan to raise funds for a rights issue of the company and it may further delay the husband’s ability to pay for the wife’s shares.  Realistically the antiques cannot be disposed of in the market all at once.  There are only about five months to go from now to the hearing of the appeal and in my view this is one of those unique cases where the position is best maintained pending the appeal. 

Conclusion

8. Accordingly I will grant the stay with a provisional order that costs of the application be in the cause of the appeal.