BK, GGB also known as N,GGB v. BK, ND

FCMC 1410/2019

[2024] HKFC 206

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 1410 OF 2019

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J U D G M E N T
( Ancillary Relief )

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This Application

1.  This is the Petitioner wife’s (“W”) application for ancillary relief against the Respondent husband (“H”).

2.  The trial was set down for 4 days between 11^th to 14^th December 2023. H did not appear, so the hearing lasted for one day with only the W’s attendance.

Parties background

3.  At the time of this hearing, H was aged 69, and W aged 41. Both were born and raised in the UK, W is of Chinese origin. There are two children of the family, namely A born in October 2015 then aged 8 and O born in July 2018, then aged 5 (together, the “Children”).

4.  I make reference to the family background in my decision in May 2021 on W’s application for relocation of the Children to the UK, and will briefly quote from that judgement as follows:

“…

4. They met in the UK in 2011. At that time, the Father was divorced with two adult sons from his previous marriage, the Mother was just in the process of divorcing her then husband.

5. The parties came to HK in November 2011. Father was then “semi-retired”, and Mother was intending to pursue her career in Hong Kong, she worked in the marketing role of a law firm here. The Father has no permanent residence status in Hong Kong, and is on a dependant visa on the Mother at the time of trial.

6. Father owned a real estate / property letting business in the UK, he alleged that he had passed the business onto his son from his previous marriage in around May 2019 shortly after the Mother’s Petition; and he also owns a real estate portfolio of his own.

7. The parties got married in Hong Kong in June 2014, the Daughters were born in Hong Kong to this union.

8. The parties’ relationship deteriorated soon after A was born, and Mother petitioned for divorce on grounds of unreasonable behaviour in February 2019.

9. Following the Petition, Father stopped paying his contribution to maintenance that he had previously provided. The Mother applied for MPS on 3 September 2019, DDJ D To made an order on 10 September 2019 for the Father to pay interim maintenance of $50,000.

10. Mother then lodged this Relocation Application in December 2019, which was filed on 2 January 2020.” 

5.  In that decision, I grant leave for W to relocate with the Children to the UK. W left with them in August 2021.

6.  On 17 January 2020, DDJ S Wong made an interim Order for Children maintenance at $50,000, this was finalized at $79,600 in her decision in October 2021.   

7.  The Court continues to manage the case for the ancillary relief claim. Order for valuation was made for numerous landed properties on 4 November 2021.

8.  An FDR was held on 7 September 2022, the parties failed to settle but Orders were made with regard to maintenance arrears and deductions to be made from escrow accounts held with the parties’ respective legal representatives.

9.  In around November 2022 shortly after the failed FDR hearing, H informed the Court that he has moved to Pattaya. W says he lives there with his 28 years old Filipino girlfriend (the “Filipino Girlfriend”).

H’s participation in these proceedings

10.  Following the relocation of W and the Children to the UK, H’s participation to these proceedings were limited.

a.  He filed a Summons in November 2021 to discharge his undertakings not to deal with his properties. He sought to charge 4 properties in the UK to pay outstanding legal fees of around $10.2M to OLN, and sell other properties to repay loans. This application was dismissed by DDJ S Wong in June 2022 with costs to the W.

b.  He attended the FDR on 7 September 2022 which failed.

c.  After the FDR on 9 September 2022, he applied for monies to be released to engage lawyers for upcoming proceedings, this application was dismissed by HHJ CK Chan on 12 January 2023.

11.  After this latter Summons was filed, he failed to participate in the ancillary relief proceedings completely.

12.  H did not attend the CMH on 1 March 2023. He did not comply with any Order made on that day with regard to filing of updated Form E and narrative affidavit; nor did he engage with W in preparation of chronology, schedule of assets and liabilities, and list of Issues.

13.  H did not attend the PTR hearing on 6 October 2023. W was directed to file and serve affidavit to prove proper service in Thailand of the Court Order of 1 March 2023 (which set down the PTR and trial dates), W’s Form E, and her narrative affirmation. W was also given leave to file the Orders dated 1 March 2023 and 6 October 2023 on H; and H was given leave to attend the trial by VCF.

14.  In response to the Court Order made at the PTR on 6 October 2023, W filed her 32^nd Affirmation regarding service of documents to H, the following are taken from her Affirmation:

a.  H last appeared in person at the FDR on 7 September 2022

b.  H received the Court Order fixing the CMH date on 25 November 2022 in person from W’s previous lawyers (“PCV”)

c.  On 3 November 2022, H wrote to inform the Court that he would be unable to attend the “pre-trial hearing on 25 November 2022 as he was unwell mentally and physically and does not have legal representation.”

d.  On 8 November 2022, HHJ CK Chan adjourned the CMH to 24 February 2023.

e.  On 17 November 2022, H wrote to inform the Court that he had left Hong Kong for Thailand and staying at a hotel in the red-light district of Bangkok.

f.  On 23 December 2022, R wrote to Court to provide his Thailand home address (“Thai home address”).

g.  On 12 January 2023, the CMH was adjourned to 1 March 2023, this Order was served by a letter dated 9 March 2023 from PCV to H’s Thai home address.   

h.  H did not attend the CMH on 1 March 2023.

i.  On 18 March 2023, claiming postage receipt is “erratic” at his Thai home address, he provided a PO Box Address in Pattaya (“PO Box Address” to the Court.

j.  Thereafter PCV served H at the PO Box Address and his email address (“btinternet”) which includes the following documents: CMH Order dated 1 March 2023 with trial dates, W’s 26^th Affirmation on 22 February 2023, W’s updated Form E on 18 April 2023, W’s 27^th Affirmation (narrative) dated 17 May 2023 and draft index bundles for comments on 4 June 2023.

k.  W started acting in person from 31 July 2023.

l.  On 3 September 2023, W served H her notice to act in person and a reminder of the PTR date and AR trial dates via registered post to PO Box address and by email to his btinternet. Thailand post office confirmed receipt which W exhibits to her affirmation.

m.  In a letter dated 10 September 2023 showing the PO Box address as his address, H claims not to have received any documentation. W rightly criticizes this and says he could have checked with the Registry, asks the W or PCV, or find out the trial dates on the judiciary website; and that as he has acted for himself since 2021 and have filed affidavits and appeal, he should know better.

n.  W also sent to H a dropbox link to the trial bundles, and informed him that physical bundles are ready for his collection at the PCV office.

o.  H did not attend the PTR on 6 October 2023.

p.  The Court has sent out a sealed copy of the PTR Order to both parties on 17 October 2023, for the H to his PO Box address.

q.  Pursuant to an Order made by me at the PTR, W served the CMH Order and the PTR Order via email to H’s btinternet, and by registered post to his PO Box Address on 20 October 2023, the Thailand post office receipt is exhibited to her affirmation.

r.  Also on 20 October 2023, W instructed a law firm in Pattaya to serve the CMH Order and PTR Order on H. The Affidavit of Service by the Pattaya law firm was attached to the W’s affirmation confirming the service of CMH Order and PTR Order, and a covering letter with trial dates to H by registered post to his PO Box address and confirm that it is in accordance with the legal procedures of Thailand.

s.  On 22 November 2023, W also served on H the properties valuation report of C Limited dated 27 October 2023 to the PO Box Address by registered post and to btinternet. The tracking receipt is attached to her affirmation.

15.  The partner of PCV has also filed an affidavit of service confirming service on H of the CMH Order, W’s 26^th an 27^th narrative affirmation, covering letter stating trial dates, chronology, list of issues, schedules of assets and liabilities, and W’s updated Form E using his Pattaya address and email to  btinternet; and confirms that H has notice of the CMH Order, PTR Order and trial dates and relevant documents for trial.

16.  Although not recognized as proper service, H has also been informed via WhatsApp using H’s phone number which he uses for court ordered video access with the Children. W says he has repeatedly used the phone to send abusive messages, so she knows it is an active number. On 11 October 2023 W informed him of the CMH Order and the trial dates, two blue ticks on the message indicates that it has been read. On 13 October, H says that his Whatsapp number “is not private and shared by one other person”, no explanation nor supporting evidence was given but apparently, he was responding to W’s information from two days before. On 16 October 2023, during a video call, W has a typed-out message in large fonts with the trial dates which she showed to H on the other end of the video call, the supporting evidence she puts in her Affirmation shows the H’s face and her message with the trial dates on the screen, W says he then ended the call abruptly.

17.  W has also informed H’s lawyers in the UK who represents him in proceedings where his previous lawyers OLN is pursing their fees.

18.  On 6 December 2023, H filed an affidavit seeking an adjournment or stay of the proceedings. This was the Friday before this current hearing on 11 December 2023. There was no affidavit of service, and W was not aware of this document. The affidavit was sworn in Thailand dated 4 December 2024, and managed to be filed with the Court two days after. Apparently, H knows how to send affidavits to Court expeditiously when he chooses to do so. It was stated in my PTR Order of 6 October 2023 that there is to be no further affidavits without leave of Court; on the basis that there is no proper application for leave to file this document, his affidavit was expunged. It is unacceptable for a milestone date of the trial to be moved without proper procedures being followed.

19.  I am satisfied that every effort has been made to effect service on the H, and find that H has been fully informed of the proceedings and been provided with the documents filed herein, and he has deliberately chosen not to respond. I am also of the view that his last ditched attempt to file an affidavit 3 days before trial seeking an adjournment as another example of his litigation tactic to delay these proceedings.

20.  While given ample opportunity to do so, H has failed to file Form E or a narrative affidavit, he did not respond to M’s submission and open proposals, and he did not appear at trial. My starting point on his case is that no challenge has been made to the W’s case.

W’s Case

21.  Since W and Children moved back to the UK in August 2021, they have resided with the maternal grandparents; and the Children attend a nearby school.

22.  As will be elaborated below, H has never voluntarily paid for the Children’s maintenance, and W has to resort to multiple court applications to pursue maintenance.

23.  W says she has been the primary carer of the Children since they were born, and H was the breadwinner. She was reassured during the marriage that she would not need to worry about the financials and livelihood for herself and the Children, she has given up her career, and therefore has little savings.

24.  During the marriage, they enjoyed a high standard of living, spacious accommodation (they live in a 1,500 square feet matrimonial home in HK), Children attend international school, they travelled frequently and stayed in 5 stars hotels.  She also contends that she would be given around $86,000 per month in the parties joint account plus use of a credit card on which she spent around $40,000 per month.

25.  She says that the parties’ total wealth is around $119,000,000.

26.  She also says there has been substantial dissipation of the matrimonial assets by H.

W’s Revised Open Proposal

27.  Based on W’s calculation, the matrimonial pot is $118,947,153, which is made up of landed properties and companies; of which assets in H’s name is $114,332,459. She says the latter amount includes assets of $63,282,905 which the H has already dissipated (to be elaborated below).

28.  She asks for 50-50 split of the matrimonial pot which would mean that each of them retains $59,473,576 (“Lump Sum award”), she asks for this sum to be paid to her within 56 days of the Court Order.

29.  W also asks for a conditional order for sale of the real properties which proceeds shall be used to satisfy the Lump Sum award she seeks. Her rationale is that the properties are subject to mortgage, and she is not aware of the amounts outstanding.

30.  W says that there are mortgages on almost all of the properties but the balance of loan cannot be seen from the UK Land Registry; evidently, H never provided this information despite repeatedly saying in his answers to the W’s first questionnaire in August 2020 that he is requesting for mortgage statements.

31.  If H does not pay the required Lump Sum award, W asks for a conditional orders for sale to apply to the 20 properties she lists in her revised open proposal. Under this ask, she shall have sole conduct of sale appointing her choice of conveyancing lawyer, at her proposed valuations. The proceeds shall pay for outstanding mortgage, conveyancing costs, estate agents charges, and balance proceeds will apply as “dollar for dollar credit” against the Lump Sum award, and any maintenance arrears and interest.

32.  She asks to retain B House, a property in her sole name, which she re-mortgaged in 2021 to fund legal fees, now with very little equity left. Also the farm which she co-owns with her brother, and a property in Spain which she co-owns with her siblings.

33.  W says she will need a personal home for her and the Children and she estimates this to be £1.65M, and costs of moving to the new home of £150,000; she says she will also need a personal car (as she borrows from her parents at this moment) which she estimates to cost around £150,000.

34.  Due to H’s complete lack of maintenance payment for the Children, she asks for a lump sum payment for them. A detailed breakdown can be seen in her revised Open proposal, she calculates school fees with annual increment for both Children till 18 to be around $13,000,000 (including VAT). She calculates the Children’s maintenance until 2036 (at which O reaches 18 years of age) at the total amount of $25,749,240, but suggests a 20% discount if the amount is received upfront, which makes this $20,599,392. In the alternative, she asks for this amount of the Children maintenance to be secured.

35.  W says it is “highly probable” that H will not comply and she seeks legal costs for future enforcement of orders of £150,000.

36.  The tally of this proposal of W is therefore $18,000,000 (accommodation + moving costs) + $1,500,000 (car) + $13,000,000 (school fees) + $20,599,392 (Children’s expense at 20% discount) + $150,000 (costs of enforcement) = $53,249,392. She therefore says this is broadly in line with the 50% of the matrimonial assets she is claiming.

H’s Conduct

A.  H’s ongoing failure to pay maintenance

37.  It is W’s case that H has never made a single payment of maintenance since the beginning of these proceedings.

38.  An interim interim maintenance Order of $50,000 for the Children was made on 10 September 2019. H then wrote to Court in January 2020 to say he would not be able to attend the CDR hearing on 17 January 2020 and the MPS hearing due to “undisclosed medical issue”; on 17 January 2020 the interim maintenance Order of $50,000 for the Children was made, the MPS hearing fixed on 30 January 2020 was adjourned.

39.  For several times thereafter, W has to come to Court to seek maintenance arrears. Payments had been made into escrow accounts with both the H and W’s legal representations of Withers and OLN from various sources including sale proceeds from real properties: 

a.  By consent an Order was made by DDJ S Wong on 12 October 2020, whereafter parties rescinded on a property purchase, extracted the deposit paid, and brought the amount back to be placed into W’s lawyer’s escrow account. The monies were used to pay arrears of maintenance from 1 October 2019 to 31 October 2020 and thereafter $50,000 each month from 1 November 2020.

b.  By Order of DDJ S Wong of October 2021, the Interim maintenance for the Children was increased to $79,600.

c.  By consent on 11 August 2022, a sum of $271,025.44 from Wither’s Escrow account was paid into W’s SCB account being partial payment of interim maintenance owed from 1 September 2021 to 1 July 2022 (Order of HHJ E Liu dated 7 September 2022).

d.  By consent on 2 September 2022, a sum of HK$231,731.89 from OLN’s Escrow account was paid into W’s SCB account, being partial payment of maintenance arrears up to and including 1 September 2022. (Order of HHJ E Liu dated 7 September 2022).

e.  Payment of $79,000 for each month of October, November and December 2022 was ordered to be made from OLN’s Escrow account. (Order of HHJ E Liu dated 7 September 2022).

f.  By Order of HHJ CK Chan dated 12 January 2023, the Children’s monthly maintenance of $79,600 is to be paid out of the OLN’s Escrow account until the exhaustion of funds therein.  

40.  The escrow account was depleted in June 2023. Calculated up to the month of trial in December 2023, H is in arrears of $487,390 and has ignored all of W’s demand letters. This non-compliance has continued and the outstanding arrears have been accumulating.

B.  H breach of undertaking

41.  By an Order of DDJ S Wong made on 12 November 2020 (“November 2020 Order”), H was allowed access to funds of £132,040.86 either from his pension fund or mortgage or sale of one of his solely owned properties. Any surplus funds from the sale in excess of this amount is ordered to be paid to his lawyers OLN’s escrow account. There was a further undertaking by H that he will not dispose, encumber or diminish the value of assets in which he has a beneficial interest including but not limited to shares in his various companies.

42.  H ended up disposing 5 properties: 30, 30A and 30B W Road which he sold in June 2021 (and W did not find out until H’s 24^th Affidavit in November 2021) and 44 and 44A R Street which he sold in March 2022 (and W did not find out until he disclosed a completion statement in April 2022).  The net sale proceeds of these properties after costs of transaction and mortgage payment came to £380,674.59.

43.  According to the November 2020 Order, H should pay the difference of £380,674.59 – £132,040.86 = $248,633.73 into OLN’s escrow account; but H did not do so. Instead, H allegedly went off and used the monies to pay his tax bill and legal costs, and according to W, there were two lots of unaccounted funds relating to the properties of £16,686.03 + £1,334.12. The result is that only £132,041 was paid into OLN’s escrow.

44.  Between the net sale proceeds and what he was allowed to have access to according to the November 2020 Order, H has deployed £248,633 – £132,041 = £116,592 for his own use in breach of the Order. Furthermore, it is W’s contention that he has sold these properties under value by £120,000, and money may well be hidden elsewhere.

C.  History of dissipation of assets

45.  H has withdrawn £150,000 pension from St James Place (“SJP”) in March 2020, and only disclosed this in his 5^th Affidavit dated 27 May 2020. According to W, he paid off various debts, but did not make any payment towards the Children’s maintenance.

46.  He has also withdrawn large amounts of dividends from his businesses. On this point, W says in her 23^rd Affirmation, her latest Form E and her 29^th Affirmation that H has withdrawn £270,121 from his business K Lettings PLC (“KLPLC”) which could be seen from the audited accounts of the company filed with the Companies House in September 2021. While she acknowledges that H used to withdraw dividends of around £26,921 annually from 2011 to 2019; but H has withdrawn larger amounts after the divorce petition: £78,921 in 2020 and the above £270,121 in 2021, thus she says he has deliberately reduced the assets in the KLPLC.

47.  H collected rent for the parties jointly owned property at 705 H House but stopped paying the mortgage. W has no option but to intervene and find funds to save the property from repossession.

48.  H re-registered KLPLC into a private company K Lettings Limited (“KLL”) and transferred 99% of his shares in KLL to his Filipino Girlfriend, which resulted in W’s application for an injunction orders in around 7 November 2023, and for which further Order was sought in the UK shortly after.

49.  H dissipated his Royal London Pension (“RLP”), W only knew about this just before this current hearing. She produced a copy email from RLP dated 16 November 2023 that they no longer hold H’s pension as one plan has been used to purchase an annuity in March 2023 which is paying tax free cash to H, and another plan was transferred to SJP in February 2021. None of this was disclosed by H.

D.  Further Dissipation and W’s application for Injunction

50.  In W’s affirmation in support for her injunction applications in November 2023, W says that she has heard from H’s son O (from a previous marriage) in late October 2023, that H intends to sell his company and all the properties underlying, and that H has valued all the properties allowing physical inspection by the valuers (whilst denying W’s ask for physical inspection of properties for the purpose of valuation for these proceeding).

51.  W has no option but to come to court to apply for injunction against H’s dissipation of assets. This took place by her initial ex-parte Summons on 7 November 2023 naming H, the Filipino Girlfriend, KLL and K Lettings Sole Proprietorship (“KLSP”):

a.  Against disposition of 19 properties in the UK and H’s Pension / retirement account with two institutions

b.  Against KLL for disposition of its shares, and underlying assets and real properties, and against KLSP of its underlying assets and liabilities

c.  And also a s.17 Summons to set aside H’s transfer of shares in KLL to his Filipino Girlfriend in November 2022 and April 2023.

52.  I informed W that her s.17 Summons will take time as there will be joinder applications, and further exchange of evidence which will no doubt derail this hearing. W was unwilling to have the trial further delayed, and she therefore withdrew her s.17 Summons, but proceeded with her other two injunctions.

53.  The Hong Kong Orders were granted on 9 November 2023. The UK Orders were made on 17 November 2023 and served on H on 20 November 2023 via registered post to his PO Box Address and via email. The Inter-partes Summons were subsequently taken out in Hong Kong on 7 December and made Orders of Court on 11 December 2023.

54.  W obtained a “replicate” Order of the Hong Kong injunction in the UK before Mr Justice Henke. The return date of this UK injunction was fixed to 20 February 2024, and H attended the 20 February 2024 hearing remotely represented by UK counsel. I quote hereinbelow from a letter from W dated 21 June 2024 copied to H about the Order made on 20 February 2024:

“Properties - Strict term for the sales, payment of arrears of the Children's maintenance when there is a sale of a property with the remaining funds to be placed in a joint escrow account;

Business - strict terms for the sale of the business with the net proceeds of the sale of the entire shareholding (without distribution to the shareholders) to be placed in a joint escrow account;

Pension income - For £750 of the Respondent monthly pension payment to contribute towards the Children's maintenance arrears;

Cost order - cost awarded against the Respondent of £12,000 (or $120,000) plus interest payable within 14 days”

W says the Respondent is in breach of this UK court order and has not paid the costs order and the monthly payment to the Children from the Pension.

E.  Failure to provide full and frank disclosure

55.  W has cited in her closing submission some examples of her request to H for disclosure disclose, including her letter of 26 May 2020 and emails in June 2021 requesting missing information from his Answers in August 2020. It has been a cat and mouse game throughout these proceedings.

56.  It can also be seen in H’s answers to the first questionnaire, that he repeatedly says he was seeking information and would provide when available but he never did.

57.  A detailed letter dated 4 July 2023 as sent to H by PCV covering requests including but not limited to mortgage statements (which he claims to be requesting in August 2020 when he answered the W’s questionnaire), tax returns, company accounts / financial statements, pension statements, evidence of loans and liabilities, Director’s loans information, information of changes to business – including privatization and new directors, withdrawal of dividends from companies, bank statements, proof of payment of legal fees, list of personal valuable items, how he managed to fund OLN legal fees of $7M prior to the relocation trial, information of re-registration of KLPLC to KLL, transfer of shares to the Filipino Girlfriend, her appointment as director, H’s resignation as director and his cessation of control of KLL in April 2023.  

58.  There was no response from H.

F.  OLN v H

59.  It is W’s case that H has “colluded” with OLN so that OLN can recover the $11+M legal costs he owes to them.

60.  According to her 28^th Affirmation, W alleges that H has spent over £1.8M on litigation. And after the relocation hearing in December 2020 and before the Judgment was handed down in May 2021, H and his solicitors OLN had unilaterally attempted to register legal charges in the sum of £1.36M against 4 properties in the UK to settle the legal costs. She says that on reminder to OLN that it was against the Hong Kong Law society regulation to facilitate breach of undertaking (from the November 2020 Order), OLN withdrew the application for legal charges on the properties.  H further applied in November 2021 for discharge of undertaking not to dispose of assets, this was dismissed by DDJ S Wong in June 2022 with costs to the W.

61.  OLN, after withdrawing the application for legal charge of 4 UK properties, and at the same time of H’s issuing his Summons for discharge, issued a writ in High Court here in October 2021 to sue H for legal costs of $12M, with a view to enforcing the decision in the UK. W says it was a contrived plan to circumvent the Hong Kong Courts by pursuing the debt in the English Court via enforcement proceeding of OLN’s civil claim for the same properties. W says she has to join the proceedings in UK to preserve the matrimonial assets, she then found out in the process that OLN has submitted 235 pages of document in the UK proceedings which shows that OLN agreed to provide H with legal advice in the background and to represent him at the final AR trial, on condition that H did not defend the Hong Kong Writ against him. This to enable OLN to obtain a default judgment and then to pursue judgment against H in the UK Courts to settle the legal debt. She says H agreed to this approach and did not defend the writ.

62.  On this subject matter, I received incomplete and limited information from H or on his instructions:

a.  Attached to H 24^th Affirmation in November 2021 is a two-page document which appears to be a “Particulars of Claim” to be heard in the High Court of Justice, Queens Bench Division between OLN and H. But as I only have two pages, the document is incomplete and I cannot even see the date of this document.

b.  From two letters from OLN (who is not on record representing H), one dated 3 September 2024, and one dated 30 September 2024 attaching an Order made by Mr Justice Cusworth of 24 July 2024, the latter OLN letter contained the sealed Order.  This Order was made as a result of H applying for variation of the W’s injunction Order dated 20 February 2024, but OLN did not attach this 20 February Order, which made cross reference impossible on the initial read.

63.  I found the 20 February 2024 Order in a prior letter from W dated 21 June 2024, wherein she wrote to Court, copied to H, with updated information. I was given some chronology of the development of these proceedings; and W also updated the Court that the accumulated maintenance arrears plus interest is at $1,075,129.45.

64.  The following is what I can glean from drawing the threads together from the documents before Court:

a.  OLN filed an application in Hong Kong to pursue outstanding legal fees from H on 21 October 2021. H filed an acknowledgement of service on the day after on 22 October 2021, he did not defend the claim. This resulted in a final Judgment in Hong Kong against H dated 17 November 2021.

b.  In May 2022, OLN wrote to H that they had received partial payment of the legal fees and informed him that there is still $10,205,414.75 owing and reserved the right to pursue.

c.  In August 2022, OLN took the claim to UK and sent a Claim Form and Particulars of Claim to H, this was probably what H exhibits in the abovementioned H’s 24^th affidavit, but as said, I only have two pages of the Particulars of Claim, and I do not have full sight of this application.

d.  W joined these proceedings as 2^nd Defendant. Judgment was obtained from Master Armstrong on 6 February 2024, giving OLN $12,409,357.46 or its sterling equivalent. W consents to her defence being struck out, on this, W says that she was “threatened” by OLN with costs of thousands of pounds she may have to face and feels that she has to consent to this application.

e.  Thereafter, OLN filed for Charging Order against a number of the properties owned by H on 8 February 2024 and obtained an interim charging order from Master Dagnall on 18 March 2024 on 11 of H’s properties.

f.  OLN also filed a further charging order on 1 May 2024 against H’s three properties on H Street.

g.  In around 7 May 2024, OLN applies to vary the Injunction Order made by Mr Justice Henke on 17 November 2023 and by Mr Justice Cusworth on 20 February 2024 (§54 herein refers), this resulted in the July 2024 Order also made by Mr Justice Cusworth (“July 2024 UK Order”) which made absolute the Charging Order on 4 of H’s properties.

h.  Incidentally, I notice that the address on the various Orders have H’s PO Box Address on record, which is the same one to which  documents were served on him and to which he never responded.

65.  In brief, the relevant parts of the July 2024 UK Order provide for the following:

a.  Charging Order were made final for four properties : L House, 46 P Street, 48 P Street and 16 C Street (the “four properties”)

b.  OLN’s application to make the other interim charging orders final on 9 of H’s properties, and for an interim charging order be made against the H Street property to be adjourned until the delivery of this decision.

c.  OLN is entitled to receive the net proceeds of sale of the four properties in satisfaction of the summary judgment debt until satisfied in full.

d.  OLN is expected to provide consent to W seeking to lift the aforementioned interim charging order (except the four properties) in order that the proceeds of sale could be distributed to W.

e.  Net proceeds of sale from the four properties after settlement of judgment debt to OLN, and net sale proceeds of other properties are to be held by an agreed solicitor, and to be used to pay for maintenance arrears owed to W and ongoing maintenance of $79,600 to the Children.

f.  W may apply to Court to lift the interim charging order of properties (other than the four properties) on giving 7 days’ notice to H and OLN.

g.  OLN has liberty to apply to restore application for interim charging orders to be made final and for an interim charging order on the H Street properties.

66.  As a result of this development, the matrimonial pot has been further reduced in size by the judgment debt obtained by OLN.

G.  What H did with his companies

67.  H has two main operating businesses, KLL and KLSP.

68.  W found out in June 2023 when checking at the Companies House that H has re-registered KLPLC into KLL in September 2022, she says this was to facilitate easier dissipation of assets without the constraints of a public company.

69.  In November 2022, which was the time when H left Hong Kong for Thailand after the failed FDR, H transferred 10 shares of KLL to his Filipino Girlfriend. He appointed her as director on 19 December 2022, then resigned as director of KLL on the following day. In April 2023, H transferred 99% of KLL’s shareholding to the Filipino Girlfriend. She then appointed H as CEO of KLL and he receives a salary. She also receives a salary.

70.  W says with the new structure, H has in effect dissipated two properties owned by KLL, namely 16a C Road (should be V Road) and 219 SB Road.

71.  As for KLSP, W found out from the annual accounts of KLPLC for year end March 2022 that there were net “recharging amounts” between KLSP and KLPLC of £69,547 in 2021 and £114,480 in 2022. She says this is a front to move assets from the limited company to KLSP for the benefit of H who operates the latter business.

H.  Avoidance of service

72.  This is detailed above under the section “H’s participation in these proceedings” where I found H to have deliberately ignore service and feigned ignorance of these legal proceedings.

I.  Failure to facilitate valuation of his properties

73.  W was unable to proceed with valuation of the H’s properties because he did not facilitate the access to the appointed valuers which resulted in W turning to another valuer to do desk top valuation instead; causing W to make extra applications, increased her cost and use of court’s time.

74.  W says she was then told by H’s son O that when H was trying to dispose of his properties, he arranged for valuer’s access to these properties. It is quite clear that he was able to facilitate access, but just would not do it to assist or facilitate this Court with this decision.   

J.  Falsified Court Order

75.  This was in my Variation of Cost Order Nisi decision from November 2021, quoting from the relevant paragraphs as follows:

“Faked Order?

34. What is also concerning is that the M had produced evidence that the F had produced an allegedly faked Order so that he could ask his nanny to take photographs of the children. Recital D of the relevant Court Order dated 16 November 2021 read as follows:

“AND UPON the Petitioner and the Respondent agreeing and undertaking to the Court and to each other not to take any photographs or videos of the children … or each other whether by themselves, their servants or agents, or otherwise during the Respondent’s access.”

But what the F produced to the supervisor to the access, Mrs A, to justify his own nanny taking pictures read as follows:

“AND UPON the Petitioner and the Respondent agreeing and undertaking to the Court and to each other not to take any photographs of the children … or each other during the Respondent’s access.”

Mrs A reported that the F was shouting at her, forbidding her to take photos while saying that his nanny could. Mrs A took a picture of what F produced, and contacted M to confirm whether this was the Court Order, which she denied.

35. This incident also led to M incurring further costs, and F made no mention of this serious allegation at all in his affidavit nor his submission. This conduct is completely unacceptable, and in the light of F’s silence on this issue, I will take this into consideration.”

76.  This act is extremely serious, although no action was taken to escalate to some form of legal consequence for H, it clearly shows what H is capable of and would go any distance to do whatsoever that suits his own purpose.

K.  Observation from previous decision

77.  W has reminded me of my findings against H in the Relocation decision:

a.  H has the ability to pay Court ordered payments but has chosen not to do so (§14)

b.  H was not credible (§181)

c.  H has compromised financial support for W and Children (§126)

78.  I also make reference to the observation from DDJ S Wong’s decision on 24 June 2022:

22. In my view, the Windsor Road property has now been sold even though a caution was registered on it and proceeds paid to OLN. As W’s Skeleton Submission rightly recalled what I said at the hearing on 9 July 2020,

“20. The Respondent continues to prioritise spending for his own purposes, and he cannot be trusted to preserve funds for the Children’s future. As Deputy Judge S Wong stated at the 9^th July hearing, the Respondent is “spending every single penny on litigation, not on the children.” Deputy Judge S Wong also disagreed with the Respondent’s priorities in his undertaking dated 10^th June 2020 to pay his “living expenses, legal fees and the interim maintenance” and stated “This is the Order. Children should come first. Not the living expenses and legal fees.”

Conclusion

79.  In my view, H has checked almost every box of litigation mis-conduct conceivable in ancillary relief proceedings; all of which must be taken into account in this decision.

The Applicable Law & Legal Principles

80.  Section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), Cap 192 sets out the matters that the court must have regard to when making orders for ancillary relief:

“(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.

81.  The Court of Final Appeal in its landmark judgment of LKW v DD [2010] 13 HKCFAR 537 has laid down a 5-step approach in assessing the division of the parties’ matrimonial assets:

1. The ascertainment of the financial resources of each of the parties calculated as at the date of the hearing (§§71 to 73);

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

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

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

5. The weight to be given to each of the factors is a matter of discretion for the court (§131).

82.  Which are to be considered against 4 guiding principles, namely:

(i)  objective of fairness,

(ii)  rejection of sex or role discrimination,

(iii)  yardstick of equal division, and

(iv)   rejection of minute retrospective investigation.

83.  The principles are trite and will be applied to the issues in this case hereinbelow.

Discussion

Identifying Parties’ Matrimonial Assets

84.  W produces the following table in her opening submission to illustrate her case on the matrimonial pot:

Category	SUM of W	SUM of H	SUM of Joint	TOTAL ($)
Bank Account	252,464	47,369
Companies		50,942,320
Insurance		-
Landed Properties (Minus mortgage)	816,080	47,920,870	3,055,680
Pension	215,970	9,366,650	-
Personal Valuable items	85,000	6,055,250	189,500
Stocks
Trust
Grand Total	1,369,514	114,332,459	3,245,180	118,947,153

85.  For the purpose of this decision, I accept W’s position in her adoption of $10 to £1, which she says is the average exchange rate over the course of the proceedings.

86.  It is clear from the numbers above that H owns the substantial part of the matrimonial pot. When the parties relocated to Hong Kong in 2011, H was aged 57 and W was aged 30. H was already a successful business entrepreneur with his successful real estate letting and management business. It is safe to assume that the assets he accumulated is prior to his relations with W. According to W’s Form E of April 2019, W’s job with the law firm gave her $36,000 salary and $24,200 housing allowance, which was not sufficient to meet the family expenses of around $183,000 declared by W.  However, H was not working when he moved here, he declared in his Form E that his income is from UK sources, which are his businesses. It is clear that he had supplemented the family expenses in Hong Kong with his earnings / income from his UK businesses. On his own evidence from his only Form E, he declared that he gave £1,500 towards the family expenses in Hong Kong. There was never any evidence that any of his UK assets were ringfenced during the marriage. I will therefore fully take into account his real property portfolio and business assets into calculation of his financial resources.

Valuation of Properties

87.  There had been hiccups in the valuation process. After the initial valuer H Chartered Surveyor was appointed by a Court Order dated 4 November 2021, the valuation was unable to be proceeded with because H has been unco-operative and refuses to give H Chartered Surveyor access to the properties for valuation purpose. Although W found out that when H disposed / intended to dispose of his real properties, he allowed his valuer to enter the premises for valuation purpose. W was left with no option but to make another application for her sole signature to proceed, when this failed, she applied again to ask for a desk-top valuation from a different valuer C Surveying Ltd (“C Limited”). It is understandable that given the lack of access to the properties, C Limited would be hindered in its valuation exercise, and W says the properties maybe undervalued.

88.  W alleges that unless otherwise stated, H owns the following properties directly or has beneficial interest in them. She has proposed the following approach in valuation of the properties:

a.  Where parties have agreed value, the agreed value will be adopted

b.  Desktop valuation by C Limited

c.  Where C Limited valuation is lower than H’s proposed value provided in December 2021, W proposes to adopt H’s proposed value.

89.  The valuation of the 29 properties owned by both parties are as follows, this table shows the figures that W wants to use:

			C Limited	R’s valuation December 2021
1	705 H House	600,000			Agreed
2	10 T House	135,000			Agreed
3	14 L Gardens	375,000			Agreed
4	16 V Road	315,000			Agreed
5	16a V Road	Included
6	219 SB Road	260,000			Agreed
7	L House		1,700,000
8	K		1,450,000
9	184, C Road			475,000
10	15 SP Court			160,000
11	6, H Street		95,000
12	103 H Street			200,000
13	103a H Street			Included
14	103b H Street			Included
15	1 T Avenue			220,000
16	16 C Street			200,000
17	46 P Street		380,000
18	46A P Street		Included
19	48 P Street		380,000
20	48A P Street		Included
21	15 B Place		275,000		50% (H alleges 100% belongs to B B-K)
22	74 B House		400,000		W 100%
23	11 and 25 S F		0		W 50%
24	1 Calle PdC, Spain	22,500			W 25% P’s Valuation
25	44 R Street	600,000		600,000	SOLD by R
26	44A R Street	Included			SOLD by R
27	30 W Road			575,000	SOLD by R
28	30A W Road			Included	SOLD by R
29	30B W Road			Included	SOLD by R

90.  To begin with, I do not accept W’s approach in paragraph c above. For the purpose of ancillary relief, the Court shall consider the value of assets at the time of trial. I am unable to allow W to pick and choose the higher value that she wants, as the alternative to C Limited’s valuation is H’s assessment from two years prior.

91.  The following are properties where parties have agreed on the value.

1	705 H House	600,000
2	10 T House	135,000
3	14 L Gardens	375,000
4	16 V Road	315,000
5	16a V Road	Included
6	219 SB Road	260,000
		£1,685,000	$16,850,000

It would appear at the time of this decision, these properties are still intact.  

92.  With the following properties, I have put in C Limited valuation as explained in §90 above, and also shows H’s assessment of the value in 2021 as reference:

		C Limited (£)	H’s valuation late 2021 (£)
7	L House	1,700,000	900,000
8	K	1,450,000	900,000
9	184, C Road	435,000	475,000
10	15 SP Court	110,000	160,000
11	6, H Street	95,000	75,000
12	103 H Street	51,000	200,000
13	103a H Street		Included
14	103b H Street		Included
15	1 T Avenue	180,000	220,000
16	16 C Street	94,000	200,000
17	46 P Street	380,000	450,000
18	46A P Street	Included
19	48 P Street	380,000	Not disclosed
20	48A P Street	Included
21	15 B Place (50%)	275,000	Not disclosed
22	74 B House (W’s)	400,000	Not disclosed
23	11 and 25 S F (W’s)	0
24	1 Calle PdC, Spain (W’s)	22,500
	Total	5,572,500
	Total (net shaded properties)	3,061,500
	Total (net shaded properties and W’s real property interests)	2,639,000

93.  The shaded properties have been the subject matter of a charging order which OLN pursued according to a civil claim made again H for outstanding legal costs, reference is made to the above section “OLN v H”.

94.  The long and short of this is that the four properties are no longer in the matrimonial pot.

95.  The following properties were sold by H:

		W’s value March 2022 (£)	H’s value Form E (April 2019) (£)	Sold by H £/date
25	44 R Street	600,000	550,000	430,000 / March 2022
26	44A R Street	Included
27	30 W Road	575,000	550,000	295,000 / July 2021
28	30A W Road	Included
29	30B W Road	Included

96.  Referring to the above paragraphs regarding H’s breach of undertaking. The net sale proceeds were £380,674.59 and of which H wrongly removed £116,592.  Repeating above, W also alleges the sales are under market value.

97.  The following properties are in whole or in part beneficially owned by the W:

		W’s valuation (£)	C Limited (£)
22	74, B House	400,000
23	11 and 25 S F		0
24	1 Calle PdC, Spain (25% equity)	22,500

98.  To bring this to a tally at this point, the total gross value of the properties available to satisfy the W’s ancillary relief claim is £1,685,000 + £2,639,000 = £4,324,000 / $43,240,000.

99.  I am conscious that W says a number of these properties are under mortgages, but H has failed completely to provide updated information on the outstanding mortgages. Therefore, due to the H’s lack of full and frank disclosure, it is impossible to assess how much equity there are in these properties.

Valuation of Companies

100.  W says H is a successful entrepreneur / businessman operating property letting business in the UK where he acts as real estate agent for landlords and manage clients’ properties. This business is operated under:

a.  KLSP (formerly known as K Property Management) a sole proprietorship; and

b.  KLL (formerly known as KLPLC)

She says that these companies have been H’s primary source of income, and during the marriage, he transferred monies from the KLL’s bank account to pay for family expenses.

101.  There are also three other companies in the matrimonial pot:

c.  K Lettings (Hong Kong) 50% owned by the H, and 50% by W. Set up in 2013, W says she assisted H with investors buying real properties in the UK, but she is of the view that there is no equity in the business and the company has no bank account.

d.  K’s Sales Limited 51% by H, 35% by his son O, 8% by former accountant and 6% by W. W says as far as she is aware, no income was generated through this business, but she does not have any information on this company.

e.  G International Limed, 100 % owned by W and which is dormant.

102.  W says in her narrative affirmation of June 2023 that she only received management account for the sole proprietorship for one year in 2018, there was no further information despite being asked.

103.  H is his Answer to questionnaire in December 2021 attached what he calls the Accountant’s Review (“Accountant’s Review”) which contains, some financial information of KLSP and KLPLC for year end March 2021, with some other financial information of the business.

104.  At the end of October 2023, with information from H’s son O, W found out that H has not only re-registered KLPLC to a private company (KLL), but he had also transferred 99% of the shareholdings in KLL to his Filipino Girlfriend in April 2023. There was no information how much was received for the transfer of shares. There was evidently no disclosure on the H’s part, and this was done in another act of flagrant breach of undertaking not to dispose of his assets. With this information, W took out the aforementioned injunction in November 2023, just before the current hearing. W contends that the value of the companies should be added back into the pot.

105.  In W’s Revised open proposals, she relies on the information provided to her from H’s son O who has operated in the letting businesses. O told her that the valuation of the letting business is 1.5% of yearly fees from lettings. O told W that there are approximately 2000 properties under management, with rental of at least £1,000 per month, the fees of which ranges from 9 - 20%. W therefore adopts a conservative number of 10%, and comes up with £1000 × 10% × 2000 × 12 months, and uses a multiple of 1.5% to arrive at £3,600,000.

106.  The W has also referred to the Accountant’s Review of December 2021 which displays the business assets and turnover and produces the following table:

	K Lettings PLC	K Lettings Sole Proprietorship	Total GBP
Net Assets	425,810	1,068,422	1,494,232
Turnover	155,800	670,260	826,060
		1.5 × turnover	1,239,090
		TOTAL	2,733,322

She contends that with insufficient disclosure, it is difficult to ascertain the true value of the business, but it must be at least £2,733,322.

107.  Subsequent in W’s closing submission, she attaches a valuation from The B Group, citing that it is a company which provides valuations and specialises in buying and selling letting business. She says they have looked at “last three years of K Lettings account” and provides a valuation of the business, stating a multiple of 1.7x of the business turnover plus net assets added in to provide an estimation of the company at £2,898,534:

	K Lettings PLC	K Lettings Sole Proprietorship	Total GBP
Net Assets	425,810	1,068,422	1,494,232
Turnover	155,800	670,260	826,060
		1.7 x turnover	1,404,302
		TOTAL	2,898,534

108.  W went on to say that this valuation is an under estimation, as H has “withdrawn large dividends, reducing the net assets since the proceedings began and has not provide full disclosure.”  She therefore uses her calculation above from §105 of £3,600,000 and adds this number to the net assets value of £1,494,232 to arrive at £5,094,232 as her proposed valuation for the businesses.

109.  I am mindful that the H’s businesses were never valued by a valuer appointed by the Court, and I am not aware that W has appointed a business valuer of her own. Although given the whole background and evolution of this case, I have every reason to believe that H would not have been co-operative in providing information to enable proper valuations to be done. That said, I am unable to accept W’s calculation of £5,094,232 for the following reasons:

a.  W has produced both an income-based type and assets-base type calculation, neither were professional calculation. But what she cannot do is to use the net assets of the company and then add this to her calculation of an income-based valuation.

b.  The B Group valuation came from an exchange of emails with the W in January 2024, which is after the trial dates. It refers to information given, but did not state what information was given. This is additional evidence which W is not entitled to just add to her closing submission without leave, context or full background. This information will not be accepted.

c.  Furthermore, W says The B Group was given last three years of K Letting account, I do not know exactly what these are and I am unable to find this in the hearing bundles. The most updated information was from H’s own disclosure in his Answers dating back to December 2021 of March 2021 accounts. These are not updated information.

110.  The more credible calculation in my view is the one that W has produced which was based on the income information she received from H’s son O, who has been involved with the businesses. I am conscious that this recent information is hearsay evidence, W has especially deposed to not wishing to bring O into this case as she does not want to worsen the relationship between H and O. But these information came under W’s sworn evidence in her application for injunction in November 2023, repeated in her revised proposal to which H never responded or contested, and also in her oral evidence. It also turns out O’s other information was substantiated in that H has indeed dissipated the company shares, and hence has siphoned an enormous amount from the matrimonial pot. In all fairness to W, there must be a value to be attached to these companies, she has done the best she could from the information she can lay her hands on to come up with the valuation of £3,600,000, this is accepted by me.

111.  As for the transfer of shares in KLL, I return to the November 2020 Order wherein H gave the following undertaking:

“And upon the Respondent undertaking to the Petitioner and to the Court that save as set out in Recitals A and B above, and Paragraphs 1.1 and 1.2 below, pending the determination of these proceedings or until further order whichever shall be earlier, he will not, whether by himself, his servants, his agents, third parties or otherwise, deal with, dispose of, encumber, or diminish any assets in which he has a beneficial interest, whether held in his sole name or held jointly with others or held in the names of third parties or otherwise, including, but not limited to his shares in and the assets held under the following companies: - 1. K Lettings plc 2. K Lettings (Hong Kong) Limited and 3. K Lettings (formerly known as “K Property Management”) without P’s written consent or an Order of the Court.

112.  Referring to the W’s intended s.17 application, which was withdrawn as the W did not want to derail these proceedings;  I am of the view that a s.17 application for setting aside the shares transfer could not serve much of what W wishes to achieve, it was never her intention to ask for shares in the company or for the transfer of the business to her, so bringing these shares back to the matrimonial pot is not the focus. That said, I still need to consider this conduct on the H’s part.

113.  Clearly H’s transfer is a breach of the aforementioned undertaking and failure in his duty of ongoing full and frank disclosure to the Court. The disposition of such a substantial part of the matrimonial pot is serious litigation misconduct, to have done so in such a surreptitious manner is highly suspicious. W queried, and rightly so, why transfer is made to a 28-year-old Filipino woman who has no apparent experience in real estate businesses. This conduct also flies against H’s repeated position in various parts of his evidence that he intends to pass this business to his son. H has, not unexpectedly, failed to come out in response. The assumption I will make is that he did not receive any consideration for his shares transfer, I will also make the assumption that the Filipino Girlfriend is not in a position to pay for the shares that were transferred to her of, adopting W’s valuation, a sum of around £3,600,000. I find, from the manner this was done, from the context of this case and H’s ongoing litigation conduct, that this was a transaction aimed at defeating W’s ancillary relief claim. It is also inconceivable that he has given away his source of an on-going stream of revenue, and has favoured his Filipino Girlfriend over his son. I shall therefore draw the necessary inference, that the shares in KLL are still at his full disposal; and adopting W’s valuation of £3,600,000, I shall place this amount back into the matrimonial pot.

Pension

114.  This is the information H reports in his Form E dated April 2019:

a.  £719,130.42 with SJP

b.  Plan x055 with RLP of £151783,82, and Plan x029 with RLP of £15,506.59

115.  I also remind myself that since the date of his only Form E, H has withdrawn £150,000 from his SJP account in March 2020, and only informed W in May 2020 in his 5^th Affidavit.

116.  According to the Accountant’s Review in December 2021, it says that the pension information provided to them by H shows that as of December 2021, the two Pension amounts are as follows:

a.  £719,646 with SJP and

b.  £202,201 with RLP

117.  The Accountant’s Review also shows that H is eligible to receive a UK state pension of £700 per month, but it says H has deferred receiving this payment at that point of time.

118.  Another development in this topic drawn to the Court’s attention is that at trial, W submits as exhibit an email exchange with RLP in around November 2023 following her injunction applications (which includes the pensions), and she was informed by RLP that Plan x055 was used to purchase an annuity in March 2023 with tax free cash to the H, and Plan x029 was transferred to SJP in February 2021. Comparing this with the Accountant’s Review, despite H moving around his pension accounts, he clearly had a Pension amounts of £920,000 at the end of December 2021.

119.  One more piece of information is from the Order made by Mr Justice Cusworth of 20 February 2024, at paragraph 6:

“6. Pension Income shall mean the respondent’s pre-existing pension income arrangements with:

a. SJP whereby the Respondent receives an annuity of approximately £2,600 per month and shall not be an amount materially higher than this; and

b. RLP whereby the Respondent receives an annual payment of approximately £20,706 and shall not be an amount materially high than this.”

120.  It is clear that the Pension is a source of financial resources for H. This also shows that H has at his disposal on a monthly basis at least £2600 + £1725.5 (£20706/12) = £4,325.5 / $43,255.

Personal Valuable Items

121.  W says H is an avid art collector, I recall this from the relocation trial, yet he declared he only has two pieces of art purchased in Hong Kong worth $10,000 in his Form E.

122.  W in her narrative affirmation exhibits an insurance list which she says dates back to December 2016. She also says the total valuable possessions are worth $4,675,365. The list is dated, but the alleged amount was not contested as H never filed any affidavit to refute W’s claim.

123.  Looking also at H’s first answers to questionnaire, there was indeed reference to his collections of art / books etc. in his Form E, which he claims that it was “upon agreement by the Petitioner in January 2019”, he disposed of his collection by gifting it to his son on 23 January 2019. He says it was done to “save the marriage per Petitioner’s demand”. Except for his mere say so, there is no evidence to support his allegation that it was gifted away. I shall therefore make a finding that these valuable collection of arts and books are available resources to satisfy the ancillary relief claim of the W.  

Bank Accounts

124.  W claims that H has a number of bank accounts but only declared one in his Form E. When she seeks further disclosure in her second questionnaire, she says his response to this was:

“The Petitioner had free access to the Respondent’s account for many years … so could have satisfied herself at the time (taking copies / whatever) if she felt she would like to keep more access in the future.”

This is an unacceptable answer for questions regarding whereabouts of one’s bank accounts, and evasive to say the least.

125.  W further adds that H has been able to pay OLN over $7 Million prior to the relocation trial, so he must have funds somewhere but never revealed it, this question was asked by PCV in July 2023, but H never provided an answer.

Dissipation by H

126.  W alleges that H has dissipated the following amounts, which are summarized in her revised open proposal with a chronology as to when some of these amounts were respectively dissipated.

Details	Category	GBP	HK$
30, 30A, 30B W Road	Properties	550,000	5,500,000
Mortgage		-323,463	-3,234,630
44, 44A R Street	Properties	550,000	5,500,000
SJP	Pension	150,000	1,500,000
Net Assets	Companies	1,494,232	14,942,320
Company Value	Companies	3,600,000	36,000,000
Dividend 2021 (KLPLC)	Companies	270,000	2,700,000
Dividend 2020 (KLPLC)	Companies	78,921	789,210
Collected Rent but did not pay for 705 H House	Properties	20,400	204,000
RLP	Pension	202,201	2,022,010
TOTAL dissipated		6,592,291	65,922,905
-£132,000 paid -£132,000 withdrawn according to 12 November 2020 Order		-264,000	-2,640,000
TOTAL dissipated		6,328,291	63,282,905

127.  She asks for these sums to be added back to the matrimonial pot.

128.  Most of these sums have been covered in the above discussion. Almost all of them are borne out of non – disclosure on H’s part: his disposition of W Road and R Street, which is in excess of what was allowed by the November 2020 Court Order, his use of the funds from these proceeds to pay for his liabilities without permission and not properly accounted for; his removal of £150,000 from his Pension and only informed W after the event with no accountability; his failure to provided updated information on his companies despite being chased rendering the valuation of the companies to be an impossible task; he did not respond to questions asked of his dividends withdrawals which decreased the value of his companies; H’s transfer of 99% of his income earning company to the Filipino Girlfriend which was only found out by W half year after the event; W also says H collected rent for H House and failed to pay for the mortgage leaving the property with arrears of mortgage payments, and did not account for the whereabouts of the rent he received.

129.  On this sort of conduct, I turn to the case of Moher v Moher [2019] EWCA Civ 1482; [2020] 2 WLR 89; [2020] 1 FLR. 225; [2019] 3 FCR. 244, which was quoted in the case of CCYL v CCSR [2022] HKFC 238 by HHJ I Wong at paragraph 86 therein: 

86.  … English Court of Appeal held that in the event of non-disclosure of a party's financial resources in a financial remedies case, the court was not obliged to give a precise figure or bracket for the undisclosed resources before making an order. Instead, it should: (i) seek to determine the extent of the undisclosed resources; (ii) draw such adverse inferences as were justified; and (iii) where appropriate, infer that resources were sufficient that the proposed award represented a fair outcome. Moylan LJ said,

86. My broad conclusions as to the approach the court should take when dealing with non-disclosure are as follows. They are broad because, as I have sought to emphasise, non-disclosure can take a variety of forms and arise in a variety of circumstances from the very general to the very specific. My remarks are focused on the former, namely a broad failure to comply with the disclosure obligations in respect of a party's financial resources, rather than the latter.

87. (i) It is clearly appropriate that generally, as required by section 25, the court should seek to determine the extent of the financial resources of the non-disclosing party.

88. (ii) When undertaking this task the court will, obviously, be entitled to draw such adverse inferences as are justified having regard to the nature and extent of the party's failure to engage properly with the proceedings. However, this does not require the court to engage in a disproportionate enquiry. Nor, as Lord Sumption JSC said, should the court “engage in pure speculation”. As Otton LJ said in Baker v Baker [1995] 2 FLR 829, inferences must be “properly drawn and reasonable”. This was reiterated by Baroness Hale of Richmond JSC in Prest v Prest [2013] 2 AC 415 , para 85:

“the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are.”

89. (iii) This does not mean, contrary to Mr Molyneux's submission, that the court is required to make a specific determination either as to a figure or a bracket. There will be cases where this exercise will not be possible because the manner in which a party has failed to comply with their disclosure obligations means that the court is “unable to quantify the extent of his undisclosed resources”, to repeat what Wilson LJ said in Behzadi v Behzadi [2009] 2 FLR 649 .

90. (iv) How does this fit within the application of the principles of need and sharing? The answer, in my view, is that, when faced with uncertainty consequent on one party's non-disclosure and when considering what Baroness Hale and Lord Sumption JJSC called “the inherent probabilities” the court is entitled, in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome. This is, effectively, what Munby J did in both Al-Khatib v Masry [2002] 1 FLR 1053 and Ben Hashem v Al Shayif [2009] 1 FLR 115 and, in my view, it is a legitimate approach. In that respect I would not endorse what Mostyn J said in NG v SG [2012] 1 FLR 1211, para 16(vii).

91. This approach is both necessary and justified to limit the scope for, what Butler-Sloss LJ accepted could otherwise be, a “cheat's charter”. As Thorpe J said in F v F [1994] 1 FLR 359 , although not the court's intention, better an order which may be unfair to the non-disclosing party than an order which is unfair to the other party. This does not mean, as Mostyn J said in NG v SG, at para 7, that the court should jump to conclusions as to the extent of the undisclosed wealth simply because of some non-disclosure. It reflects, as he said at para 16(viii), that the court must be astute to ensure that the non-discloser does not obtain a better outcome than that which would have been ordered if they had complied with their disclosure obligations.

130.  It has been said where a party has been guilty of not making full disclosure, he could not complain if uncertainties were determined against him: L v C [2007] 3 HKLRD 819, at [191(2)]. And in the case of NG v SG (Appeal: Non-Disclosure) 2011 EWHC 3270 (Fam), [2012] 1 FLR 1211, at paragraph 16 (viii):

“The Court must be astute to ensure that a non-discloser should not be able to procure a result from his non-disclosure better than that which would be ordered if the truth were told. If the result is an order that is unfair to the non-discloser it is better that than that the Court should be drawn to into making an order that is unfair to the Claimant.”

131.  On the analysis that I have set out, I find that H is in grave dereliction in compliance with his duty of full and frank disclosure. I am fully justified in drawing adverse inferences against H that he has dissipated and / or hidden assets and has failed to account for them.

132.  As guided by the above authorities, the proper approach to be taken is to infer that his resources are sufficient or are such that the proposed award to the W represents a fair outcome.

Financial Resources of the W

133.  W has limited resources. She says that during the marriage she was assured that she does not need to work, and she does not have much savings to her name. Based on her most recent Form E, other than 50 % of H House and her sole ownership of 74 B House, her liquidity position consists of $523,874 in her bank account, pension of $214,819; and personal valuables (art work and furniture) of $113,810. She has liabilities of $5.28 million made up of largely outstanding legal bills, and loans from family and friends.

134.  She owns 74 B House solely, which was acquired prior to the marriage, this is rented out, but income is subsumed by mortgage costs and tax, and the outgoing exceeds the rental. This has a value of £450,000 in her latest Form E of April 2023 with an outstanding mortgage of £340,892, but C Limited values this at £400,000. This gives her a net equity of £59,108 / $591,080 according to the valuation annexure to her revised open proposals.

135.  She also co-owns a farm with her brother, which C Limited assess to be of no value; and also owns 25% of a property in Spain, this is worth £22,500 on her own valuation. H has provided no responses to her valuation of any of her properties.

H’s Income & Earning Capacity

136.  H is aged 70, I do not expect him to be working although I do find that he has the resources to meet his needs.

137.  Despite H saying that he has retired from KLL, his income is derived from the business profits, withdrawal of dividends and drawings, receipt of salary and income from his property investments portfolio.

138.  H’s tax returns are incomplete, W only has tax return for 2017, 2018 and 2020. W correctly said that there should not be any difficulties in producing theses are they must be in his possession, so the withholding of these is deliberate.

139.  In her narrative affirmation and revised Open proposal, W calculates the H’s income for 2019 to be £830,063 for the year and £69,171.92 for the month. The breakdown are as follows:

K Letting PLC employment	3,607
K Lettings Sole Proprietorship Drawing	230,440
Properties	165,369
Bank interest	440
K Letting PLC dividend	269,206
State Pension	9,946
Net business profit for tax purposes – K Lettings Sole Proprietorship	65,725
TOTAL GBP	830,063
GBP per month	69,172.92

140.  It appears that she does not have enough information to put together comparable numbers for the subsequent years.

141.  My observation is that H should continue to have income from most of these sources after the ancillary relief claims, maybe except his real properties portfolio. According to his answers to the W’s second questionnaire, his son has been giving him an expense allowance of $15,000 per month. After transferring shares to his Filipino Girlfriend, he continues to receives a salary from KLL, he can withdraw money and take profits from the sole proprietorship, the pension information from the February 2020 Order made by Mr Justice Cusworth in February 2024 shows he should have pension income of at least $43,235 , and he has access to the state pension (of £700 / $7,000 per month as at 2021) from which he can start drawing down. Depending on the assets division of the real property’s portfolio, it may well be that his income from that end will decrease, but according to the W’s case, H does not have a lot of personal needs.

W’s Income and Earning Capacity

142.  When the parties were living in Hong Kong, W worked in a part time role in marketing for a law firm in Hong Kong. This was terminated in February 2020 during the Covid pandemic. She has always been the main carer of the children after their birth.

143.  After the relocation decision, she moved back to the UK in November 2021. She took up a part time administrative role at a law firm for $5,810 per month. But due to the anxiety and stress caused by the divorce and H’s abusive behaviour, she was unable to continue and resigned in April 2022; she is not working at this time. It is her intention that in time she could take on part time work so she could provide somewhat for the Children.

144.  W is still young and well educated, and given time in the near future to recover from the stress of these proceedings, I would expect her to return to the work force in due course although it is accepted her choice of work needs to take into regard her obligations to look after two young daughters and their schedules.

Assessing Parties’ Needs

W’s Financial Needs

145.  W has been living with her parents since her return to the UK, she asks for a property of her own to live with the Children, from her previous living standard during the marriage, this is a reasonable ask. She estimates this to be £1.65M and the cost of moving to be £150,000.

146.  She also asks for a car, the one she has is on loan from her parents. It makes sense that she would need a car of her own when she moves out with the Children, her evidence shows that this should be in the range of £150,000 with a monthly cost of $7,100.

147.  I find these two capital needs to be reasonable, although she may need to look at her budget realistically in the full context of the award she will receive.

148.  She presents the following expense table in her narrative affidavit as well as her latest Form E of April 2023, which are as follows:

GENERAL	HK$
Rent	28,590
Utilities	477
Management Fees (mortgage and fees for E and B property)	38,835
Food	9,530
Household expenses	7,897
Car expenses	12,839
Insurance	324
Others: - electronics	1,430
TOTAL : General	99,470
PERSONAL
Meals out of Home	5,432
Transport	477
Clothings / Shoes	2,907
Personal grooming	3,240
Entertainment / presents	2,097
Holiday	4,785
Medical / Dental	4,679
Tax	2,097
Insurance premia	162
Others – birthday party	1,592
Others – electronics	1,654
Others – Fitness	3,698
Others NI Contributions	95
TOTAL : PERSONAL	32,894

149.  My observations on her General Expenses are as follows:

a.  It is expected that after these proceedings and when she gets her own place, there will be no rental expenses.

b.  The purchase of the B property has been rescinded, so that item of expense will be reduced.

c.  It is noted that she wants to keep the property at E, which is B House, but if the liability could be paid off in whole or in part, her expenses could also be reduced; or if the property can be sold, then there will be more liquidity at her disposal.

d.  I observe that her car expense is very high and should be cut down.

On a broad-brush basis, I will assess the General Expenses for the family to be $45,000.

150.  For her personal expenses, my general observation is that her discretionary expenses are high and need to be pared down. I shall assess her personal expenses to be $20,000. Adding this amount to 1/3 of the General Expenses makes give the amount of $35,000 for W’s expenses per month.

151.  I have decided to allocate $33,000,000 to W. This amount to be used for her and the Children’s accommodation, a car, and a lump sum award for her. I am of the view that she could reduce her accommodation and car needs to $16,000,000, which will leave her with $17,000,000. On my assessment of $35,000 per month, this could last her around 40 years; and if she is still minded to spend her intended budget for accommodation, the net lump sum award could still last for around 35 years. There is the added advantage that she gets this lump sum award upfront which will give her some flexibility to manage.

Children’s Needs

152.  W produces a very detailed analysis of the Children’s needs in her revised open proposals. Against the background of this case, she asks that their maintenance be capitalized. I accept that this is a reasonable request and within my jurisdiction to make.

153.  Her estimate of the Children schooling, for A up to 2033 and for O up to 2036 is in a total of $11.29M. I do not intend to take into account the VAT which W proposes, but I will accept this figure and round this up to $11.3M.

154.  She also says that her total ask for the Children is $38,733,341, and that this includes school fees and school related expenses, but she will take a 20% reduction in the maintenance portion if receives upfront, and that she will accept the lower amount of 33,582,720. She then refers to the abovementioned detailed breakdown in her revised open proposal.

155.  The detailed breakdown of the Children’s expenses is put together showing the amounts on a monthly basis by the year from 2024 to 2036. She has also separated this into “Children” and “General”. I am not sure what the “General” represents, or whether this is the Children’s share of the General expenses.

156.  Starting with the “Children” only expenses, the amount per month ranges from £13,000 to £20,000 over the years, equivalent to $130,000 to $200,000 meaning a monthly expense per child of $65,000 to $100,000, inclusive of school fees. This looks to be on the high side. For reference I will extract her 2024 numbers, these are in GBP and on a monthly basis; and understandably, these numbers are projected to increase over the years:

	£ / monthly
Child minding fees	3,050
Clothings / shoes	240
Entertainment/ presents	346
ECA	1,096
Extra tuition	1,140
Holidays	1,500
Lunches and Pocket money	48
Medical / dental	120
Birthday parties	200
Children equipment	122
Days out/theatre	160
Electronic	111
Hairdressers	120
Meals out of home	400
School related expenses	919
Supervision	416
Other transport	40
School books and stationery	50
Schools fees	2,869
Uniform	171
TOTAL	13,118
TOTAL (net school fees)	10,249

157.  I find some of these number excessive: 

a.  the child-minding fees are excessive. It is expected that in the short while W should be looking after the children full time, and / or arranging her work schedule around the children. $30,000 per month is too high for this category.

b.  There is also a large spending of a total of $22,000 of ECA and tuition, some choices in these categories will have to be made and the Children’s expectations managed.

c.  There are also other discretionary spendings that need to be pared down.

W needs to understand that while Court would take into regard previous living standards of the parties, she will have to budget the Children spending reasonably within the amount she is going to receive.

158.  Coming back to her numbers from £13,000 to £20,000. I would remove the school fees element from these numbers as the latter are not discretionary spending, this will become approximately £10,250 to $13,250. Again, on a broad brush basis, I will adopt an average figure of £11,000 / $110,000 for the two Children, namely $55,000 each child per month.

159.  I fail to reconcile the W’s “General” expenses in her annexure against that in her abovementioned Form E, but I will use the $45,000 General Expenses I assess above, and each child is to be attributed $15,000 of the General Expenses.

160.  A has 9 years before reaching age 18:

($55,000 + $15,000) x 12 x 9 = $7,560,000

O has 12 years:

($55,000 + $15,000) x 12 x 12 = $10,080,000

161.  The total Children’s expenses on my assessment are:

School fees for both Children	$11,300,000
A’s maintenance	$7,560,000
O’s maintenance	$10,080,000
	$28,940,000

I accept the W’s offer to take a reduction of 20% for this upfront receipt of Children maintenance. This takes the Children’s maintenance to $23,152,000.

H’s Needs

162.  H has moved to Thailand since November 2021. His only Form E predates this move, and therefore I have no indication of what his needs are in Pattaya.

163.  The only other information on this is in W’s narrative affirmation, where she quotes H’s answer to second questionnaire dated December 2021; and says that:

“Since discovering God” he has an “epiphany”, and then goes on to say that he doesn’t “need much (other than, say, a bed and some rudimentary clothes / etc, with a roof over my head, I can exist with owning little or no stuff to blur the lines between necessity and desire”

164.  W therefore says the H’s future expenses are therefore very low. I find that his needs could be satisfied from his financial resources I summarized above.

Application of the Sharing Principle

165.  I recognize that this is a marriage of 9 years, W has in part focused her career in part in Hong Kong, but has also devoted a large part of her marriage life to looking after the family and in particular the Children.

166.  I find this to be clearly a needs case which must trump the principle of equal sharing of the matrimonial pot. It is paramount that W’s and Children’s needs must be catered for from the matrimonial pot.

Departure from Equality?

167.  I am unable to ascertain the exact size of the matrimonial pot, in the circumstances, case law is clear that I should not immerse myself in analysing the minutiae of the disputes, issues, and allegations to come up with a number or bracket for the matrimonial pot.

168.  If the final award I make represents a departure from equal sharing of the matrimonial assets, I am of the view that it is well justified. In particular, H’s conduct throughout these ancillary relief proceedings have seriously prejudiced the W’s case, he has left her destitute resulting in heavy debts to defend her case, and he has ignored the Children’s needs. It is just and fair for the Children that their maintenance should be capitalized so that W will not be subject to further antics of the H, to do otherwise would have the consequences of destabilizing the Children’s life, and affecting their best interest.

Deciding the Outcome

169.  I have come to the conclusion that the W is to be given a lump sum award of $33,000,000 for herself, and a capitalized amount of the Children maintenance of $23,152,000; making this a total of $56,152,000. I take the view that W should keep the assets on her side of the balance sheet, and this lump sum award is made to her in addition.

170.  Relying on the above cited Moher v Moher, and faced with the H’s conduct and the extent of non-disclosure on his part, I am entitled to “infer that the resources are sufficient or such that the proposed award does represent a fair outcome.”  I am of the view that this is a fair outcome to W for her ancillary relief claim.

171.  W will have to look to H’s properties portfolio, pension, and other personal assets to satisfy this claim; and it is acknowledged that she still has an ongoing uphill task in enforcing this Order against the assets in the UK against the backdrop of the UK Court’s decision in relation to OLN’s civil claim against the H’s assets, and the various interim charging orders in place.

Orders

172.  For the reasons aforesaid, I make the following Orders:

a.  H shall pay a lump sum to W of $56,152,000, made up of $33,000,000 for W, and $23,152,000 capitalized maintenance for the Children, within 45 days from the granting of Decree Absolute.

b.  The previous Order of October 2021 for H to pay $79,600 for the Children’s maintenance do stand until the full payment of the capitalized maintenance for the Children.

c.  Section 18 Declaration to be issued.

Costs

173.  Costs should follow the event, and clearly the W has been successful in her claim. Bearing in mind the H’s conduct which has been elaborated above, I am of the view that W is entitled to costs of these ancillary relief proceedings, including all costs reserved, on an indemnity basis, and I so order. This to be a Costs Order nisi to be made absolute within 21 days hereof.