CL v. LWP

FCMC16222 /2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 16222 OF 2012

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J U D G M E N T
(Section 17 and Ancillary Reliefs)

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Introduction

1.  This is the trial of the Petitioner’s Notice of Application issued under Section 17 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“Section 17 Notice”) and the trial of Ancillary Reliefs.

2.  The Petitioner is the Wife and the Respondent is the Husband whom I will refer as “Wife” and “Husband” respectively in this Judgment.  The 1^st Intervener is the mother in law of the 2^nd Intervener both of whom I will refer as “LLH” and “LWT” respectively.  The 2^nd Intervener is the natural daughter of the Husband born out of his earlier marriage.

3.  This is the second marriage of both parties. 

4.  The Husband’s first marriage ended upon the death of his first wife in 2001 whom I will call “Madam Cheung”.  LWT, who is aged 33 at this trial, born out of the Husband’s first marriage.

5.  The Wife’s first marriage ended upon a divorce in Mainland China.  There was a son born out of the Wife’s first marriage.  The Wife could not recall when her first marriage started and ended.

6.  According to the court records, the Wife was somehow represented by 6 different law firms since commencement of these proceedings, namely, (a) Solomon Chong & Co., (b) Cheung & Yeung, (c) Ho & Partners, (d) Kwok, Ng & Chan, (e) Kevin Ng & Co., and (f) Cap. Chan & Co.  In the middle of the trial, the Petitioner chose to represent herself in place of Messrs. Cap. Chan & Co.

7.  There are 4 dispositions made by the Husband in respect of which the Wife sought to set aside in her Section 17 Notice.  They are :-

(a)  Sale of a property situated at 406E Des Voeux Road West,Hong Kong (“406E property”) on or about 6 March 2013 to the 1^st Intervener LLH;

(b)  Sale of half interest of a property situated at Luen Wai Apartments, Nos. 136/142 Belcher’s Street, Hong Kong (“Luen Wai Property”) on or about 8 May 2012 to the 2^nd Intervener LWT;

(c)  A sum of HK$280,000 (which was made up of HK$100,000, HK$100,000 and HK$80,000 respectively) transferred to the 2^nd Intervener LWT;

(d)  A sum of HK$500,000 transferred to a person by the name HLS.

8.  The Section 17 Notice was issued by the Wife’s then solicitors Messrs. Cheung & Yeung, on 5 February 2014 on the said 4 dispositions.  Amongst the 4 dispositions sought, it is the Husband’s position that long before the trial he had conceded, for the purpose of saving costs and time, to the agreed value of the 406E Property be considered and counted as part of the pool of family assets.  As early as 6 August 2014, the Husband through his lawyers informed the Wife’s then lawyers that he would procure the 1^st Intervener LLH to sell or transfer the 406E property if so directed by the Court.   

9.  On the first day of trial (i.e. 3 February 2015), the Wife was represented by Messrs. Cap. Chan & Co. and engaged Counsel Miss Eunice

Yung.  The Wife applied for and was granted leave to withdraw 2 out of the 4 dispositions, namely, withdrawing disposals (a) and (d) in her Section 17 Notice.  Thus, the trial of the Section 17 Notice concerns dispositions (b) and (c) only.

Background

10.  At trial, the Husband was aged 68 and the Wife was aged 49.  They came to know each other around September/October 2001 in Mainland China.  They married each other in June 2003.  There is a child of the family born in May 2006 whom I will refer as “the Child”.

11.  On 1 November 2012 the Wife presented a Petition relying on the fact of Unreasonable Behaviour leading to the breakdown of the marriage. The Husband filed his Acknowledgement of Service (Form 4) intended to contest the divorce.  As no Answer was filed at the end, Decree Nisi was granted by His Honour Judge K.W. Wong on 2 April 2013.  Custody of the Child was granted to the Wife with reasonable access to the Husband.  Ancillary Reliefs were adjourned for further disposal with the Financial Dispute Resolution (“FDR”) took place before Deputy Judge A. Yim on 18 January 2014.

12.  Pursuant to an Order of this Court dated 26 May 2014, LLH and LWT were joined as 1^st and 2^nd Interveners respectively in respect of the Wife’s Section 17 application.

The statutory provision on setting aside dispositions

13.  Section 17 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) provides :

“(1) Where proceedings for relief under any of the relevant provisions of this Ordinance (hereafter in this section referred to as "financial provision") are brought by a person (hereafter in this section referred to as "the applicant") against any other person (hereafter in this section referred to as "the other party"), the court may, on an application by the applicant-

(a) if it is satisfied that the other party is, with the intention of defeating the claim for financial provision, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, make such order as it thinks fit for restraining the other party from so doing or otherwise for protecting the claim;

(b) if it is satisfied that the other party has, with the intention aforesaid, made a disposition to which this paragraph applies and that if the disposition were set aside financial provision or different financial provision would be granted to the applicant, make an order setting aside the disposition and give such consequential directions as it thinks fit for giving effect to the order (including directions requiring the making of any payment or the disposal of any property);

(c) if it is satisfied, in a case where an order under the relevant provisions of this Ordinance has been obtained by the applicant against the other party, that the other party has, with the intention aforesaid, made a disposition to which this paragraph applies, make such an order and give such directions as are mentioned in paragraph (b);

and an application for the purposes of paragraph (b) shall be made in the proceedings for the financial provision in question.

(2) Paragraphs (b) and (c) of subsection (1) apply respectively to any disposition made by the other party (whether before or after the commencement of the proceedings for financial provision), not being a disposition made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any such intention as aforesaid on the part of the other party.

(3) Where an application is made under this section with respect to a disposition which took place less than three years before the date of the application or to a disposition or other dealing with property which is about to take place and the court is satisfied-

(a) in a case falling within subsection (1)(a) or (b), that the disposition or other dealing would (apart from this section) have the consequence, or

(b) in a case falling within subsection (1)(c), that the disposition has had the consequence,

of defeating the applicant's claim for financial provision, it shall be presumed, unless the contrary is shown, that the other party disposed of the property with the intention aforesaid or, as the case may be, is, with that intention, about to dispose of or deal with the property.

(4) In this section-

"disposition" (財產處置) does not include any provision contained in a will or codicil but, with that exception, includes any conveyance, assurance or gift of property of any description, whether made by an instrument or otherwise;

"the relevant provisions of this Ordinance" (本條例的有關條文) means any of the provisions of sections 3, 4, 5, 6, 6A, 8, 11 (except subsection (6)) and 15;

and any reference to defeating an applicant's claim for financial provision is a reference to preventing financial provision from being granted to the applicant, or to the applicant for the benefit of a child of the family, or reducing the amount of any financial provision which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made at the instance of the applicant under the relevant provisions of this Ordinance.

(5) The provisions of this section shall not apply to a disposition made more than three years before the commencement of this Ordinance.”

The burden and standard of proof

14.  There is no issue that the Husband bears the burden of proving that disposals made less than 3 years from the date of the Section 17 Notice were not intended to defeat the Wife’s claim for ancillary reliefs. 

15.  As to the standard of proof, it was set out in Rayden andJacksonon Divorce and Family Matter, 18^th edition as follows :

“27.15 As to the standard of proof, the question to be asked by the judge after reviewing the evidence is : “Am I satisfied that the disposition was made with the intention of defeating the wife’s claim for ancillary relief ? The standard of proof remains the balance of probabilities, although it has been said that since what has to be proved is not merely a dishonourable intention but a dishonest and fraudulent one, the evidence which is required to tip the balance, has to be correspondingly more convincing. ‘Satisfied’ in this context means no more than that the judge has to make up his mind.”

16.  It is important to also note the decision of Judge Melloy in C v. T and others (FCMC No.12488/2013) at paragraph 40 of the Judgment where the learned Judge had said of which I agree :

“40. I agree that in considering the intention of the parties it is necessary to look at each disponor’s conduct. In other words can each side’s intention to defeat the other’s claim, be gleaned from their conduct at the time in question ? Consequently I accept that the circumstances surrounding the making of the dispositions are highly relevant (my emphasis).”

17.  With these principles in mind, I now consider the evidence of the parties.

Evidence of the 1^st and 2^nd Interveners

18.  The 1^st Intervener LLH attended the first day of trial.  She is aged 66.  She produced a medical certificate to confirm her having undertaken coronary surgery in 2014.  She also confirmed due to her senility, she was not capable of handling her case and agreed to be bound by whatever decision of this Court in respect of the 406E property transferred to her by the Husband.  Nevertheless, this witness had sworn in and I have the benefit of seeing her condition.  I accept her senile condition.

19.  The 2^nd Intervener LWT adopted her 1^st and 2^nd Affirmations (B:193 -196 and B:250 -253) and the attached exhibits thereunder (B:254 - 265) as her evidence in chief. 

Evidence of the Husband

20.  The Husband adopted his 1^st and 2^nd Affirmations (B:187 - 192 and B:237 - 240) as his evidence in chief in opposition to the Wife’s Section 17 application.  He also confirmed the contents of his 2 Form Es (C:339 - 361 and C:396 - 417) are true and correct. 

Evidence of the Wife

21.  The Wife filed 6 Affirmations in total (B: 147 - 151, 152 - 186, 197 - 204, 205 - 217, 218 - 229, 272 - 278) and 2 Form Es (C: 308 - 338 and 443 - 584) and confirmed all the contents are true and correct. 

Discussion and Analysis on the Section 17 Application

(a)   Disposal of the Luen Wai Property

22.  The Luen Wai Property was purchased in September 2007 (completion of sale and purchase in October 2007) by the Husband and LWT as joint tenants at a consideration of 1.75 million.  The Husband’s evidence was that he paid around 1 million and the balance was put up by LWT from her own savings which was about $250,000 and another $500,000 or so from the insurance moneys received from the estate of LWT’s late mother (that is, the first wife of the Husband). 

23.  According to the Husband, when his first wife Madam Cheung passed away in 2001, LWT was only about 19 years of age.  He was asked by his first wife to well look after LWT which he promised.  Around 2007, LWT was living him, the Wife and the baby girl born out of this marriage in 2006 in a rented flat by the name Luen Tak Apartments. On 2 August 2007, he suddenly received a telephone call from LWT.  Over the phone, LWT told him that whilst she was at work, she received a phone call from the Wife.  The Wife scolded her with foul languages and also questioned her whether she had treated the Wife as a member of the family.  Over the phone, the Wife also asserted that she had broken the lock of LWT’s bedroom.  On hearing this, the Husband immediately told LWT to move out from the flat in Luen Tak Apartments and not stay in there anymore for her personal safety reasons.  About a month later in September 2007, he bought the Luen Wai Property which is about few minutes walk distance from the rented flat in Luen Tak Apartments.

24.  Around early 2012, the Husband was told by LWT that she was going to get marry.  In order to keep his promise and assurance to his first wife Madam Cheung of well treating LWT, he decided to transfer all his legal and beneficial interests in the Luen Wai Property back to LWT.  The reason for him to purchase the Luen Wai Property in his and LWT’s names as joint tenants in 2007 was that he worried LWT, who was at the age of about 24 and single at that time, might squander off assets unwittingly.  Since LWT was going to get marry, he believed that it was the right time to ‘step out’ and let LWT to be the sole property owner.  In any event, the transfer although recorded as an ‘assignment’ at a consideration of 3 million, was under legal advice for stamp duty purposes and in fact there was no money changed hands between him and LWT.  During cross examination, the Husband strenuously denied of any intention to defeat the Wife’s ancillary reliefs by making such transfer which took place in May 2012.      

25.  LWT’s banquet took place on 12 March 2013.  However, it was both the Husband’s and LWT’s testimonies that the decision of marriage was formed about a year ago in 2012.  LWT in her exhibits “LWT-3” produced a note of the Holiday Inn Golden Mile dated 15 August 2012 confirming the date of banquet on 12 March 2013 (that is, 7 months later) and the venue is at the Crystal Ballroom.  According to this note, it recorded guarantee of 21 tables of 12 persons up to a maximum of 28 tables.  The minimum food and beverage consumption is HK$190,000 + 10%.

26.  In general, the testimonies of LWT tally with that of the Husband (that is, her Father).

27.  As said, it is for the Husband to rebut the statutory presumption under Section 17 of the MPPO by evidence to the civil standard of balance of probabilities.  The Court could also take into account the surrounding circumstances and the conduct of the disponor when ascertaining the intention at the time of the disposition (see C v. T supra).

28.  First of all, I accept it is not uncommon to start with wedding arrangement well in advance of the actual date of wedding, especially for those weddings where banquet is intended.  One year or so in advance is not unusual.  The evidence of the Husband that he came to know about LWT’s marriage in early 2012, in my view, is credible.  

29.  The next question which follows is that whether the Husband’s reasons given, as to the purchase of Luen Wai Property in September 2007 registered in the joint names of himself and LWT and the subsequent transfer of his interests therein back to LWT in May 2012 are, on balance of probabilities, credible so much so that the section 17 statutory presumption can be rebutted ?  To answer this question, it is pertinent to first go back to the reason and evidence leading to the purchase of the Luen Wai Property.  It is common ground that on 2 August 2007 the lock of LWT’s bedroom was broken open by the Wife.  It is the Husband’s case that such incident triggered the purchase of the Luen Wai Property.

30.  The Wife in her 4^th Affirmation in reply to LWT’s Affirmation did not deny that she had broken open the lock of LWT’s bedroom on 2 August 2007.  She also did not deny there was a telephone conversation between the 2 of them on that day. As to the reason for the break open, however, the Wife’s evidence is completely different to that of LWT’s evidence.  At paragraph 18 of the Wife’s 4^th Affirmation, she said on that day before noon time, LWT called her at home telling her that she had carelessly locked up her own bedroom.  LWT asked the Wife whether she had any solution for her.  The Wife then suggested LWT to get a locksmith but LWT responded that she did not want to waste money.  LWT instead asked her to break open the lock and wait for her Father (i.e. the Husband) to fix a new lock after his work.  The Wife simply did what LWT had asked her to do.  Surprisingly, the Wife did not say anything further as to what had happened after the break open, for instance, had LWT needed her help to get something out of the bedroom which was urgently and immediately needed by LWT on that day ?      

31.  In my view, to break open one’s lock to his/her bedroom is a draconian act that would happen only in rare circumstances or where there are dangers if not to do so.  Had LWT wanted the Wife to break open the lock of her bedroom simply because LWT carelessly locked the door, there must be some other compelling reasons with urgency so to do. 

32.  Comparing the reasons given by the Wife and LWT regarding the break open of the lock of LWT’s bedroom, I have no hesitation to prefer and believe the evidence of LWT rather than the Wife. 　The Wife could only give the reason that LWT had carelessly locked up her own bedroom.  If that was the case and also if LWT did not want to waste money getting locksmith (where there is no such finding), why would LWT not wait until his Father (i.e. the Husband) to break open for her after his work on that day ?  Why LWT would have to call back home and asked the Wife to just break it open but then tell the Wife to wait for his Father (i.e. the Husband) to fix another lock after his work ?  Her Father (i.e. the Husband) could and might as well do it in one go, that is, break the old one and then fix a new lock afterwards.     

33.  It is undisputed that on 2 August 2007 LWT had locked her bedroom.  More importantly, LWT was not cross examined by the Wife’s Counsel Miss Eunice Yung as to the reason why LWT had to lock up her bedroom on that day or had LWT done so on any other day.  At that time LWT was residing with the Wife and her Father (i.e. the Husband) under the same roof.  In my finding, LWT’s evidence that the Wife called her on that day and then questioned her whether she had treated her as a member of the family was more likely than not the motive behind for the Wife to break open the lock. 

34.  The Husband’s evidence that he had told LWT to leave and not to return home for personal safety reasons is, in my view, credible.  I have had the benefit of observing the Wife’s demeanour in Court.  Having had that benefit and with my finding of fact as to the motive behind the break open, it is not difficult to apprehend the Husband’s worries of LWT’s personal safety at that time.

35.  As to the Husband’s worries of LWT might squander off the Luen Wai Property unwittingly, I also find him credible.  During cross examination, the Husband confirmed his relationship with LWT is very good.  LWT is the only child of his first marriage with the late Madam Cheung, his first wife.  The majority of the capital sum for purchase of the Luen Wai Property (at 1.75 million) came from funds of his own (about 1 million) and his late first wife’s insurance moneys (about $500,000), it is fair and reasonable for him to be rest assured that his daughter LWT is mature enough so as not too easy to squander off assets before letting her in full control of the Luen Wai Property.   His contribution of the 1 million, according to his evidence, was the bulk of his cash on hand at that time from the sale proceeds of a property in Taikoo Shing.

36.  Now I will turn to the crucial issue of disposal to LWT of his share and interest in the Luen Wai Property in May 2012.  On the peculiar facts of this case, the circumstances surrounding the disposal are both material and important.  Same again, I also have had the benefit of observing the Husband’s demeanour in Court.   In the Husband’s evidence in chief, he was asked about his feeling when he came to know LWT was getting marry, he grudgingly answered his Counsel “有些唔捨得 !”. 

37.  With my earlier finding of the Husband’s knowing LWT’s marriage in early 2012, the Husband’s promise and assurance to his late first wife, LWT being the only child of the first marriage with whom the relationship is good, and most importantly the fatherly love, also considering all the surrounding factual circumstances at the time of disposal in May 2012, including the fact that it was the Wife who filed her Petition for divorce on 1 November 2012 and not the Husband first disposed of his share in the Luen Wai Property in May 2012 and then petitioned divorce 6 months later, I find it more probable than not and am satisfied that the Husband’s explanation for the disposal of the Luen Wai Property is both true and accurate.   Accordingly, the statutory presumption under Section 17 of the MPPO is successfully rebutted by the Husband as to the disposal of the Luen Wai Property.  The transaction dated 8 May 2012 stands and would not be set aside.

(b)  Disposal of the HK$280,000

38.  The Husband’s case is that LWT’s marriage is a joint one, so called “聯婚” in Chinese.  He needed to share the banquet expenses and also, according to Chinese culture and custom, give to LWT (“嫁粧”) in Chinese which include jewelleries and some gold ornaments.  The 3 withdrawals from his bank account totalling HK$280,000 were all for settlement of his share of LWT’s banquet and related wedding expenses, including the (“嫁粧”) of jewelleries and gold ornaments.

39.  LWT at paragraph 8 of her 2^nd Affirmation gave an account of the expenses spent on her wedding which amount to HK$273,817 together with some documentary exhibits.

40.  Exhibit “LWT-2” is 4 credit cards receipts all under the same card holder name of KWW on the same date of 8 December 2012.  The merchant name is Chow Tai Fook Jewellery. There is no dispute that KWW is the husband of LWT. 

41.  On the credit card transaction day in question, that is, 8 December 2012, the Husband (that is, the Father) and his daughter LWT and KWW went together to purchase some jewelleries and gold ornaments intended for the wedding.  Since he did not have money to pay at that time, it was KWW who paid first and then he later reimbursed KWW through LWT.   According to LWT’s evidence, the total spending exceeded one of the credit cards so KWW had to use another credit card to settle the bills.

42.  Exhibit “LWT-3” is the note from Holiday Inn dated 15 August 2012 reserving the wedding banquet.  It shows minimum food and beverages consumption of HK$190,000 + 10%. There is a requirement of HK$31,000 as deposit on or before 12 September 2013 (which I believe is a typo and should be 2012).

43.  Exhibit “LWT-4” is a credit card receipt for HK$25,000 with the merchant name “Cocoon Bridal Co Ltd.” dated 11 March 2013.  LWT gave evidence that this was the expenses for the wedding dress on the date of the banquet.

44.  I noticed the 4 credit card receipts were all on the same day at the time of 17:47, 17:48, 17:58 and 18:10.  I am satisfied that all the spending were made for the same purpose as the Husband had so testified which LWT also confirmed.  I also accept the Husband’s evidence that KWW, as the ‘would-be’ son-in-law at that time, had paid first. 

45.  I also accept the other documentary exhibits are spent for LWT’s wedding of which the Husband (as the Father of LWT), in line with Chinese culture and custom of “聯婚”, have to share normally half. 

46.  On balance of probabilities, I am satisfied with the Husband’s evidence that the disposal of HK$280,000 was intended as a gift towards LWT’s “嫁粧” and related wedding expenses rather than to defeat the Wife’s ancillary reliefs.  The statutory presumption under Section 17 of the MPPO is also successfully rebutted by the Husband.

47.  Accordingly, the Wife’s Section 17 application to set aside the Luen Wai Property disposal and the transfer of HK$280,000 completely fails.  I will deal with the question of costs of her Section 17 application in the later part of this Judgment.

The Wife’s Ancillary Reliefs

48.  Save for the background information which I have set out in paragraphs 10 and 11 of this Judgment, I wish to add that Decree Nisi had yet to be made absolute .  The Child of the family is at the age of 9 at the time of trial.

The Law on Ancillary Relief

49.  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. (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.“

50.  Moreover, financial provisions for the child of the family are contained in Section 5 of the MPPO as follows :-

“5. (1) Subject to the provisions of section 10, in proceedings fordivorce, nullity of marriage or judicial separation, the court may make any one or more of the orders mentioned in subsection (2)-

(a) before or on granting the decree of divorce, of nullity of marriage or of judicial separation, as the case may be, or at any time thereafter;

(b) where any such proceedings are dismissed after the beginning of the trial, either forthwith or within a reasonable period after the dismissal.

(2) The orders referred to in subsection (1) are-

(a) an order that a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments and for such term as may be so specified;

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

(c) an order that a party to the marriage shall pay to such person as may be so specified for the benefit of such a child, or to such achild, such lump sum as may be so specified.

(3) Without prejudice to the generality of subsection (2)(c), an order under this section for the payment of a lump sum to any person for the benefit of a child of the family, or to such a child, may be made for the purpose of enabling any liabilities or expenses oreasonably incurred by or for the benefit of that child before the making of an application for an order under this section to be met.

(4) An order under this section for the payment of a lump sum 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.

(5) While the court has power to make an order in any proceedings by virtue of subsection (1)(a), it may exercise that power from time to time; and where the court makes an order by virtue of subsection (1)(b) in relation to a child it may from time to time make a further order under this section in relation to him.

51.  The Court also has the power to grant a property transfer order or a sale of property order under ss.6 and 6A of the MPPO:

“6. (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 sections 10 and 25(1), make any one or more of the following orders, that is to say-

(a) an order that a party to the marriage shall transfer to the other party, to any child of the family or to such person as may be specified in the order for the benefit of such a child such property as may be so specified, being property to which the first-mentioned party is entitled, either in possession or reversion;

…………

………

………

(e) an order for the sale of such property as may be specified in the order, being property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest, either in possession or reversion, and for the use of the proceeds of such sale…

6A. (1) Where the court makes an order under section 4, 5 or 6 then, on making that order or at any time after the making of that order, the court may make a further order for the sale of such property as may be specified in the order, being property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest, either in possession or reversion.

……………”

52.  The governing principles in relation to the distribution of the family assets in dissolution of marriage are set out in section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192, (“section 7 factors”) which states 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.

53.  In the leading case of LKW v DD[1] the Court of Final Appeal sets out 4 principles as to how section 7 shall be approached, which are stated as follows:

a.   The first is that the implicit objective of a section 7 exercise is to arrive at a distribution of assets which is fair as between the parties[2];

b.   The second is that the concept of fairness requires the refutation of any gender or role discrimination[3];

c.   The third principle is that, with a view to eliminating insidious discrimination and promoting fairness, judges should check their tentative views on distribution against a “yardstick of equal division” which should be departed from only for good, articulated reasons[4];

d.  The fourth principle is that the court should not countenance any attempt to engage in costly and often futile retrospective investigations of the failed marriage which tend to deplete the parties’ (and the courts’) resources and to increase antagonism and discourage settlement[5]. 

54.  The Court of Final Appeal went further to lay down 5 steps as to how the Court should do when exercising section 7 as follows:

a. The first step in the exercise is to ascertain the financial resources of each of the parties calculated as at the date of the hearing[6];

b. The next step is for the court to assess the parties’ financial needs[7];

c. If surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the court to apply the sharing principle to the parties’ total assets, leaving the “needs” question previously considered to be dealt with under that principle[8];

d. The fourth step therefore involves considering whether good reasons exist for departing from the principle of equal division[9];

e. When deciding the outcome, the court is not bound to depart from equality in the division of the parties’ assets even if one or more of the factors considered are engaged on the facts.  The weight to be given to such considerations is a matter of discretion for the court[10].

The 3 other properties in question

55.  It is not in dispute that as at the date of this trial, apart from the said Luen Wai Property, there are 3 other properties forming the family assets, details of which and agreed values are as follows :-

(a)  Flat x on x Floor, Sun On Building, 490 Queen’s Road West, Hong Kong (“Sun On Property”) under the joint names of the Husband and the Wife, agreed value at 3.4 million;

(b)x Floor (Front Portion), 406E Des Voeux Road West, Hong Kong (“406E Property”) under the sole name of the 1^st Respondent, agreed value at 4.5 million;

(c)  中華人民共和國武漢市武昌縣江夏區文華路xx家園第x期x楝x單元502室 (“Wuhan Property”) under the joint names of the Husband and the Wife, agreed value at HK$0.5 million.

56.  As early as 17 March 2014, the Husband at paragraph 10 of his Affirmation (B:190), agreed to have the value of the 406E Property counted into the pool of family assets.  Thus the fact that the legal ownership is the 1st Respondent, in so far as the computation exercise for ancillary reliefs is concerned, is immaterial.  This is also the reason for the Petitioner to withdraw her item of disposal (a) in the Section 17 Notice, although only at trial which is about a year later after the Husband’s concession.

The parties’ other assets

57.  Both parties’ Counsel in their respective Opening Submissions set forth the other assets of the Husband and Wife disclosed in their respective latest Form Es are only Cash values and Insurance values.  According to the parties’ latest Form Es, those values are :

(a)  Cash in Banks : $297.65 (Wife)/$31,919.76 (Husband)

(b)  Insurance Values: $78,042.96 (Wife)

The Wife’s Open Proposals

58.  There are altogether 7 Open Proposals of the Wife.  In her latest 7^th Open Proposals dated 25 June 2015, she proposed as follows :-

(a)  Sale of the Sun On Property with proceeds to be equally shared, the Husband to bear all the costs and expenses;

(b)  Sale of the 406E Property with proceeds to be equally shared, the Husband to bear all the costs and expenses;

(c)  Sale of the Wuhan Property with all the proceeds be given to the Husband, the costs and expenses be equally shared;

(d)  The Husband’s 50% share of the interest in Luen Wai Property be included in the sale proceeds of (a), (b) and (c) above and equally shared; and

(e)  The total proceeds of sale of Sun On Property, 406E Property and Wuhan Property, after deduction of all costs and expenses in these legal proceedings, be deposited into Court as education costs for the child of the family.

The Husband’s Open Proposals

59.  The Husband’s Open Proposals remained unchanged throughout and are as follows :-

(a)  The Sun On Property be to the Wife;

(b)  The Wuhan Property be to the Wife;

(c)  The ownership of the 406E Property remains unchanged;

(d)  The Wife shall vacate the 406E Property within 3 months;

(e)  The ownership of the Luen Wai Property remains unchanged;

(f)  No maintenance payment between the Husband and the Wife.

The other issues

60.  Before going to the first step of identification of assets, there are the following issues arising from the parties’ allegations or evidence which need to be resolved further, one way or the other. 

(a)  Whether the Wife had, without the knowledge and consent of the Husband, withdrawn a sum of HK$200,000 out of the Husband’s balance of HK$300,000 in his bank account ? (see paragraph 8 of Husband’s Affirmation dated 17/3/2014 at B:189 to 190 and paragraphs 24 to 30 of the Wife’s 4th Affirmation in reply dated 31/3/2014 at B:210 to 211) (“Issue (a)”);

(b)  Whether the Husband had taken away a Rolex watch and a new camera worth $3,700 from the Wife while she was not at home ? (see paragraph 2.10 of the Wife’s latest Form E dated 20/1/2015 at C:454) (“Issue (b)”).

61.  Besides, whether the Wife has disclosed without prejudice materials in her 4th Affirmation by way of Exhibit “CL-6” of which this Court should not consider the contents (“Issue (c)”).

62.  Whether the Wife had failed to disclose her Bank of China Account No.012xxxxxxxx441 and Agricultural Bank of China Account No.41-xxxxxxxxxxxx127, both of which were only revealed during cross examination and in trial of which adverse inference should be drawn against the Wife (“Issue (d)”).

The Court’s Views

63.  On Issue (a), the Wife in her evidence in chief on 4 February 2015 testified that she was given full control of all finances by the Husband for the period between April and August in 2012.  The Husband allowed her to keep all rental incomes from the Sun On Property and 406E Property.  The Husband thanked her for not pursuing police prosecution against him of an attack inflicted on her neck (义頸事件) which happened earlier.  She was given the bank card by the Husband of which the Husband strongly denied.  She said at that time she was really shocked (受寵若驚) because the Husband had never treated her well financially.  Upon enquiry from this Court (between 3:46:35 to 3:46:56 hours), the Wife confirmed that she had withdrawn around 300,000 odd dollars (三十幾萬) between April and August 2012 (that is within 4 months) from the Husband’s bank account and that bank account was subsequently closed.  Upon further enquiry, the Wife said those moneys withdrawn were at first deposited in her personal bank account but later all spent on legal fees.  Withdrawing 300,000 odd dollars (三十幾萬) within a short period of 4 months (April to August 2012) and then followed by filing a divorce petition 3 months later (November 2012) is, in my view, nothing but a premeditated plan squeezing finances rather than entrustment of finance.  I do not believe the Wife’s evidence.  Accordingly, upon the Wife’s own admission, I find that a sum of $300,000 should be accounted for by the Wife and be added back to the family pool of assets for computation.

64.  On Issue (b), it is noted that the Wife in her 1^st Form E dated 13 January 2013 at paragraph 2.10 (C:318) on valuable personal items where she deposed “N/A”.  She only raised such allegation 2 years later at the same paragraph 2.10 (C:454) in her 2^nd Form E dated 20 January 2015.  This is incredible.  In the absence of further cogent evidence such as receipts or at least photos, there is no such finding against the Husband merely based upon the Wife’s bare allegation.  It is unbelievable that her memory about such event which allegedly happened in 2012 would be better in 2015 (at the time of preparing the 2^nd Form E) than in 2013 (when the 1^st Form E was prepared).  Both Form Es are prepared by different lawyers acting for her.

65.  On Issue (c), Husband’s Counsel submitted in his Closing Submissions that the draft pre-nuptial agreement prepared by Messrs. Solomon Chong & Co. produced as Exhibit “CL-6” is in substance and contents ‘without prejudice’ and which does not fall within any of the exceptions for admission of ‘without prejudice’ evidence.  I agree with Counsel.  No reference would be made to that exhibit.

66.  On Issue (d), during cross examination in the afternoon of 5 February 2015 (between 3:20:00 to 3:25:00) of the Wife upon a loan of RMB100,000 (equivalent to HK$126,438.32) appeared at paragraph 2.13 of her 2^nd Form E (C:457) allegedly made and credited by bank transfer to her by her sister and then, by referring to her Bank of China savings account entries (C:490 - 491), no such credit entries could be seen.  The Wife then disclosed that she also had a checking account with the Bank of China which she had used for issuing cheque payments for the Child’s school expenses.  This 2^nd Form E was prepared by lawyers but the Wife further attempted to explain by saying that she thought there was no need to disclose since there was no money in it.  I do not accept the Wife’s explanation.  Reason being that she had, however, chosen to disclose her Bank of China savings account no.012xxx788xxxxxx72, even though there was only left with a minimal credit balance of $27.45 !

67.  The Wife’s Counsel Miss Eunice Yung confirmed that her instructing solicitors were not informed of such checking account either.  Leave was then granted for Messrs. Cap Chan & Co. to take instructions from the Wife who was in the course of giving evidence but limited to this undisclosed checking bank account and to produce relevant bank statements for 12 months at the next hearing.

68.  At the adjourned hearing on 1 April 2015, it transpired from the documents produced by the Wife that apart from the undisclosed checking account with the Bank of China, there was another bank account with the Agricultural Bank of China (“ABC”) belonged to the Wife which she had not disclosed.

69.  Besides, although the Husband took no issue, it is noted that the Wife in her 1^st Form E (Part 2) failed to disclose the Wuhan Property at all.  The Wife’s first lawyers Messrs. Solomon Chong & Co., apparently acting on instructions, once wrote to the Husband’s lawyers saying that the Wuhan Property was resumed by the relevant Mainland authority without any compensation (A:110).  It was, however, upon further enquiry, the Wife then in her Affirmation dated 19 September 2013 (B:148 – 150) admitted the existence of the Wuhan Property.

70.  I find the Wife is less than honest and frank in her testimonies.  Despite she was legally represented by different lawyers at the time of her 1^st and 2^nd Form Es, she is also far from satisfactory as to discovery.  In appropriate cases the Court can adopt a robust approach and draw adverse inference against a party for wilful non disclosure or impose costs sanctions.

71.  With all the above findings, I now turn to consider the Wife’s ancillary reliefs claim and the financial provisions that are required of for the child of the family, that is, the Child.

Identification of Assets

72.  As said, the parties’ bulk of assets are landed properties rather than liquid cash.  The Husband retired in 2012 and the Wife is a full time housewife.  The livelihood so far largely came from rental incomes received from the tenants in the other 3 cubicles in the 406E Property and the 3 cubicles in the Sun On Property.   It is lucky that there are no mortgages on these landed properties so that the entire rental incomes could become the main source of financial support for the Wife and the child of the family over the years.

73.  The Wife although in her 2^nd Form E declared there are 2 loans from her sister and mother, she confirmed those liabilities should not be counted in the computation exercise.

74.  The Husband’s liquid cash in his 2^nd Form E was $31,919.76.  The Husband did have MPF of $174,309.71 paid to him by Manulife on 3 December 2012 (C:395). His evidence was that such sum was spent as part of the contribution to LWT’s wedding expenses, some for legal fees and his living costs.  The MPF regime started in the end of year 2000.  The parties married in 2003 and the Husband received his MPF accrued benefits upon his retirement in 2012.  It is thus fair and reasonable in the computation exercise to apportion such MPF accrued benefits down to 75% by reference to the duration of marriage between 2003 and 2012 (that is 9 years) out of the entire contribution period from 2001 to 2012 (roughly 12 years).  There would be no contribution by the Wife to the Husband’s pre-marriage MPF accrued benefits.  Therefore, I find 75% of the MPF (that is, $130,732) belonged to part of the family assets and to be counted in the computation exercise.

75.  As regards the Luen Wai Property, the 1 million contribution by the Husband came from the sale proceeds of the Taikoo Shing Property of which the Wife had only briefly resided when she was on her 2-way permit to come to Hong Kong.  This Taikoo Shing Property was sold in 2007 and, according to the Affirmation evidence of the Husband which was undisputed, the Wife came to Hong Kong on a 1-way permit only in 2008.  Counsel for the Husband in his Closing Submissions invited the Court to consider the Taikoo Shing Property was in the joint names of the Husband and his former Wife, that is Madam Cheung (of which that marriage had lasted for 28 years) as joint tenants.  Also, this was a pre-marital property with contribution mainly from the former wife Madam Cheung.

76.  I agree with Counsel.  On my finding that the Luen Wai Property was held by the Father (that is, the Husband) on trust for LWT prior to LWT’s marriage, this landed property is excluded from the pool of family assets.  In my view, the Wife’s contribution to the Taikoo Shing Property, if there was any, would be just bare minimal.

77.  This follows that whatever rental incomes from the Luen Wai Property prior to the transfer back to LWT in 2012 should also be excluded from computation of the pool of family assets.

78.  With the above identification, the pool of the family assets values are as follows :-

(a) Landed Properties (Sun On, 406E and Wuhan)      (paragraph 55 above)	-	$	8,400,000.00
(b) Husband’s Cash Values      (paragraph 57 above)	-	$	31,919.76
(c) Wife’s Cash Values      (paragraph 57 above)	-	$	297.65
(d) Wife’s Insurance Values      (paragraph 57 above)	-	$	78,042.96

Add back :

(e) Cash Values withdrawn by Wife      (paragraph 63 above)	-	$	300,000.00
(f) 75% of MPF withdrawal by Husband      (paragraph 74 above)	-	$	130,732.00
Total :		$	8,940,992.37
Round up to, say :		$	8,940,000.00

Assessing the parties’ financial needs

79.  The next step is to assess the parties’ financial needs, and the exercise quite often will stop at this stage because the total resources may be insufficient to go beyond or even to meet both parties’ financial needs.  If that is the case, then there will be no room for applying the sharing principle.

80.  In determining the parties’ financial needs, those of the factors under Section 7(1) of the MPPO will be of relevance.  By considering the needs, it should be ‘generously interpreted’ which is in effect trying to ensure that each party and their children have enough so as to maintain the standard of living that they had enjoyed during the marriage.  Those needs should also be assessed with flexibility taking into account of all the relevant circumstances of each particular case.

Income, earning capacity, property and other financial resources

81.  The Husband is now aged 68 and retired.  He testified in Court that he has no place to live in because he dared not to return to the 406E Property where the Wife was in occupation of one of the cubicles.  Occasionally he would return to Mainland China and stay with some relatives and friends.  Thus, he needs a place to live in.  As to financial resources, he relied upon his savings.  He does not have any physical disability.

82.  The Wife is now aged 49 and has been a housewife taking care of the child of the family who is at the age of 9.  She complained of having physical disability of torn of meniscus of right knee (右膝半月板磨損).  The child suffered from Glucose-6-phosphate dehydrogenase deficiency (G6PD).  She has completed courses with the Employment Retraining Board (“ERB”) and had once undertaken household chores for 2 employers in January 2011. However, due to her pain in the right elbow, she could not continue with the work and had to resign.  In March 2013, she undertook part time work of 6 hours a day but again due to elbow pain, she then resigned.   

83.  Upon cross examination by Husband’s Counsel on 5 February 2015 on her 3^rd Affirmation, the Wife however agreed she could in fact undertake short hours of light work, depending on the nature of work.  The Wife in her answers during cross examination further agreed that she did not receive any medication in Queen Mary Hospital or seeing any other doctors in Hong Kong as to her problem of torn of meniscus of right knee (右膝半月板磨損).  Reason given was that after taken the medication from Shenzhen, PRC, she felt better. 

84.  I have some reservation about the Wife’s physical condition.  If her torn of meniscus of right knee and elbow pain are so serious which had prevented her from taking up even odd jobs or caused her to resign, why there is no evidence of receiving medical treatment or doctor consultation in Hong Kong ?  The only possible inference to be drawn is that her physical condition is not as worse as she had now alleged in Court.

85.  In any event, I am prepared to say both parties’ have limited earning capacity.  It is more likely than not that they may not be able to support the other party from any income that he or she could earn.  Hence, the Court would have to take this factor into account when deciding what kind of ancillary reliefs would be appropriate, fair and reasonable to both parties and the child of the family.

86.  It is noted that the Wife attempted to adduce additional evidence of her medical report dated 9 June 2015 issued by the Department of Psychiatry, Queen Mary Hospital by attaching to her written Final Submissions.  Since such information was not disclosed at any time prior to or as late as during trial and subject to the Husband’s questioning (if any), these additional and belated evidence could not be considered by the Court.  It is worth to mention that at paragraph 1.12 of her 1^st Form E (C:310) where any physical or mental disability has to be stated, the word “None” was put in there.  In her 2^nd Form E (C:445), only “Torn of meniscus of right knee” was stated.  There was no reference to any psychiatric disease or illness in her two Form Es filed in 2013 and 2015 both prepared with the aid of different lawyers or in any of her Affirmations filed in these proceedings.

87.  Moreover, the Wife also attempted to adduce a number of further documentary evidence as to the Husband’s historic financial records, MPF records, Motor Vehicle Sales Contract, Securities Account statements, Fixed Deposit Confirmation, Traffic Fixed Penalty Demand and photographs by attaching to her written Final Submissions. For the same reason of non disclosure prior to or during trial, those additional and belated evidence could not be considered by the Court.

Financial needs, obligations and responsibilities etc

88.  The child of the family whose custody, care and control rests with the Wife.  There is no dispute that the child suffered from G6PD which is a kind of allergy to certain food and aspirin.  There is no particular treatment to G6PD save and except that certain food and aspirin should be avoided.  At present, the child is at the age of 9. No evidence was adduced by the Wife as to there is any extra medical or financial needs for the child for treatment of the G6PD problem, whether current or in anticipation for the future, save and except those usual monthly expenditure items in the latest Form E. 

89.  The Wife in the past and at present was relying upon rental incomes to support herself and the child.  The Husband principally relied upon his savings after retirement.  Thus, this is another peculiar feature of this case which calls for special attention when determining ancillary reliefs.  

Standard of living before breakdown of marriage

90.  Both parties’ have no issue that the standard of living before marriage broke down was about average.

Age of each party and duration of marriage

91.  At present, the Husband is aged 68.  The Wife is aged 49.  At the date of the Decree Nisi in April 2013, the marriage had lasted for about 10 years.   

Physical or Mental disability of either of the parties

92.  The Husband is both physically and mentally sound.  The Wife suffered from torn of meniscus of right knee and elbow pain.

Contribution made by each parties to the welfare of the family

93.  After marriage, the Wife has been a full time housewife and mother looking after the child of the family.  The Husband was the sole bread winner. 

94.  The contribution of the parties to the welfare of the family was about average or more or less the same.

Compensation

95.  The parties have no dispute on this factor.      

Applying the sharing principle

96.  Had division of the monetary values of the family assets of $8,940,000 been appropriate, my view is that the equal sharing principle should apply as a starting point subject to any good reasons for departure from equal sharing and also provisions for the Child’s maintenance.

97.  The peculiar features of this case include the bulk of family assets are landed properties, both parties have housing needs, both parties have only limited earning capacity, both parties have limited cash on hands but nonetheless have to support the Child now only at the age of 9 for another 12 or 13 years before she completes full time education. 

98.  Although the monetary values of the pool of family assets of $8,940,000 might be viewed upon to be sufficient to satisfy the needs of the parties, the reality is that the bulk of those assets ($8,400,000 out of $8,940,000) take the form of landed properties rather than ready cash on hand.  Moreover, there is the complication of the 406E Property of which the legal and beneficial ownership had been found to be vested with the 1^st Respondent’s but nevertheless the value of which (that is, 4.5 million) was agreed to be computed as part of the family assets between the Husband and the Wife.  The other complication is that the Wife and the Child are actually residing in this 406E Property.  

99.  Taking into account all the above, it is my view that a straight forward equalisation of the monetary values by sale of the landed properties, whether or not to also include the 406E Property, is an option but may not be the best choice.

Any good reasons to depart from equal division ?

100.  Towards the latter part of the trial when the Wife was acting in person, she repeatedly criticized her previous lawyers on the handling of her case.  Her criticisms addressed not just to one firm of lawyers.  Whilst these are not matters which this Court should concern with, the fact remains is that she was found to be far from satisfactory in her disclosure whilst she was legally represented. 

101.  It is not the Husband’s case that there need to be departure from equal division based upon the Wife’s non disclosure.  It is submitted by Husband’s Counsel at paragraph 96 of the Closing Submissions that a small deviation from exact equal sharing by reference to the Wife’s limited contribution to the accumulation of family assets over a relatively short period of time. 

102.  Considering the overall circumstances and all the relevant factors, I decided there be no departure from the equal sharing principle.  Thus, the ratio of sharing would be maintained at 50:50 between the parties as to the pool of the family assets.

Deciding the Outcome

103.  Taking into account this Court’s finding that the transfer by the Husband to the 1^st Respondent in respect of the 406E Property not being a disposal with intent to defeat the Wife’s ancillary reliefs, unless there is separate arrangement for renting between the Wife and the 1^st Respondent or otherwise with the consent of the 1^st Respondent, it is fair and reasonable for the Wife and the Child to vacate and surrender possession of the cubicle in occupation to the legal owner of the 406E Property namely, the 1^st Respondent. I believe this is also within the contemplation of the Wife since her 7^th Open Proposals had included the sale of the 406E Property.

104.  What follows next is the immediate question as to where the Wife and the Child should then reside ?  Again, apart from renting elsewhere, the only option open is either the Sun On Property or the Wuhan Property, both jointly owned by the Husband and the Wife.  Given the fact that the Child has been studying in Hong Kong and without affecting her studies, to reside in the Sun On Property would be the one and only one choice apart from renting elsewhere.  Such arrangement would also have the benefit of saving living costs as there is no mortgage on Sun On Property.  I wish to add that the Luen Wai Property completely falls out of the scene for the unsuccessful setting aside of the conveyance by the Husband to LWT.  

105.  At paragraph 3.6 of the Wife’s latest Form E (C:460), the Sun On Property was partitioned into 3 cubicles renting for $4,900, $4,500 and $4,600 a month, totalling $14,000.  If the Wife and the Child occupy one of the cubicle in the Sun On Property same as they are now living in one of the cubicle in the 406E Property, say for instance, to occupy the cubicle rented for $4,600, the rental incomes for the remaining 2 cubicles added up to $9,400 (that is, $4,900 + $4,500 = $9,400).  I should also say that since the rental information was some time ago, the current market rental might be different.  Anyway, there will be enough rental income from the other 2 cubicles in the Sun On Property for paying the Child’s monthly expenses of about $6,800 a month (C:462). Adopting the figure of $9,400, there will be a surplus of $2,600 ($9,400 - $6,800 = $2,600).

106.  As regards the Wuhan Property which the Wife in her testimonies in Court said it had been left vacant for some time, it could be sold and the proceeds, say at the agreed value of $500,000, be kept as capital reserve.  Alternatively, the Wuhan Property may be rented to generate rental income. 

107.  The Wife’s 7^th Open Proposals of selling the Sun On Property and the Wuhan Property (plus also selling the 406E Property and the Luen Wai Property assuming that she could succeed in her Section 17 application but had now failed) and deposit the total proceeds of sale into Court as education expenses for the child is, in my view, unworkable for at least 3 reasons :-

(a)  No provision to cater for the accommodation needs of the parties  and the Child;

(b)  The costs of accommodation, probably by renting elsewhere, would easily use up whatever capital reserve generated from the proceeds of sale of the Sun On Property and the Wuhan Property.  It is a fact that rentals are subject to adjustment and there are also inflation factor.  Accommodation costs are known to be high nowadays;

(c)  With the age of the Husband now at 68, even if he is able to find work and receive income, it is unlikely that he would be able to fully support the Child (who is now aged 9 only) until she is 18 or finishes full time education, whichever is the later.  On the facts of the present case, it seems that reliance upon rental incomes to support the Child’s maintenance and education costs is comparatively more realistic and practical than expecting work income from her 68 year old Father (that is, the Husband) who has already retired since 2012 until now.

108.  Having said, I will now deal with the Husband’s accommodation needs and living costs.  First, there is no claim for maintenance or financial support by the Husband against the Wife. There was no such provision either in his Open Proposals to the Wife.  Presumably he had his own financial arrangements for living costs.  Secondly, the Luen Wai Property was not used by LWT as her matrimonial home.  The evidence was that the Luen Wai Property was rented out.  LWT is now living with her husband KWW in North Point.  Again, presumably the Husband would seek assistance from LWT as to his accommodation needs, whether in the Luen Wai Property or elsewhere.

Conclusion

109.  Given careful and full consideration of the above and all the surrounding circumstances, I decided there should be a clean break between the parties in terms of ancillary reliefs upon compliance with the property orders and lump sum payment in this Judgment.

110.  I decided that the monetary values of the landed properties, namely, the Sun On Property of 3.4 million andthe Wuhan Property of 0.5 million be allotted to the Wife.  This means that the Husband’s share and interests in these 2 landed properties would be transferred to the Wife for her to become the sole owner.  The Wife would then be having 3.9 million in terms of monetary value in respect of landed properties.  The monetary value of the 406E Property of 4.5 millionremains withthe Husband.

111.  For the equal sharing of the total family assets of 8.94 million ($8,940,000), that is to say, each party would be entitled to have 4.47 million. 

Husband’s assets value

Wife’s assets value

$	4,500,000.00	(406E Property)	$	3,400,000.00	(Sun On Property)
			$	500,000.00	(Wuhan Property)
$	31,919.76	(Cash Value)	$	297.65	(Cash Value)
$	130,732.00	(75% MPF Value)	$	300,000.00	(Sun withdrawn)
			$	78,042.96	(Insurance Value)
Total $	4,662,651.76		$	4,278,340.61
(Round up to $	4,662,000)		(Round up to $	4,278,000)

---

112.  For equalisation of 4.47 million ($4,470,000) for each party, the Husband would have to pay to the Wife $192,000 (that is, $4,662,000 - $4,470,000 = $192,000).

113.  As to maintenance of the Child, there will be no order for any periodical payments at this stage but without prejudice to the right in future to seek the same from the Respondent.  As said, for the time being, the Child’s financial needs might have to rely upon rental incomes.

114.  At paragraph 4.1 of the Wife’s latest Form E, her general monthly expenses are in the region of $4,370.  At paragraph 4.2, her personal expenses (excluding the item of interim maintenance of $6,618.18 allegedly to have been paid by her) are in the region of $4,323.19, thus making a total sum of $8,693.19 a month.  To round up, say, $8,700 a month.

115.  Given the fact that there will be a surplus of around $2,600 a month out of the rental incomes of the Sun On Property (see paragraph 105 above) which she could spend to offset her expenses, the net value of her monthly expenses would then become $6,100 ($8,700 - $2,600 = $6,100).

116.  With the sum of $192,000 (see paragraph 112 above), the Wife would have about 31.4 months ($192,000 divided by $6,100) to spend on it.  In my view, such 31.4 months would be long enough time for the Wife to re-adjust herself back to the labour force in the market.

Orders

117.  My Orders in respect of ancillary reliefs are as follows :-

(a)  The Husband (Respondent) do within 90 days from the date of this Judgment transfer all his legal and beneficial interests in the Sun On Property (subject to any tenancies therein) to the Wife (Petitioner) at nil consideration;

(b)  The Husband (Respondent) do within 90 days from the date of this Judgment complete the transfer of all his legal and beneficial interests in the Wuhan Property to the Wife (Petitioner) at nil consideration;

(c)  All costs and expenses for the transfer of the Sun On Property and the Wuhan Property be shared equally between the parties;

(d)  The Husband (Respondent) do pay to the Wife (Petitioner) a lump sum of $192,000 within 60 days from the date of this Judgment; and

(e)  There be liberty to apply for implementation of this Judgment.

Incumbrances

118.  For the findings above on the landed properties, I also direct that the following registrations at the Land registry be forthwith discharged and vacated at the costs and expenses of the Wife :-

(a)  Memorial No.14061700930011 in respect of the 406E Property;

(b)  Memorial No.12112201450012 in respect of the Sun On Property; and

(c)  Memorial No.14052300440050 in respect of the Luen Wai Property.

Costs

119.  Taking into account the outcome on ancillary reliefs and comparing with the latest Open Proposals of the parties, I find the Husband’s Open Proposals in terms of the landed properties matched the Judgment.  The only departure is the lump sum payment order.  The Wife’s latest Open Proposals fell far beyond the Judgment.  I decided that the Wife should bear 80% of the Husband’s costs in respect of the ancillary reliefs, including all costs reserved, to be taxed if not agreed on party and party basis.

120.  Since the Wife had completely failed in her Section 17 application, I decided that the Wife should bear all the Husband’s costs thereof, including all costs reserved, to be taxed if not agreed on party and party basis. 

121.  I also grant Certificate for Counsel for the Section 17 and ancillary reliefs trial since both were heard together.

122.  This is a costs order nisi which will become absolute unless any party apply to vary the same within 14 days from the date of this Judgment.

Section 18 declaration

123.  I also grant a declaration under Section 18(1)(b)(i) of the Matrimonial Proceedings and Property Ordinance, Cap.192.

124.  Last but not least, I wish to express my gratitude to Counsels’ valuable assistance to the Court.