L v. L

CACV 7/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 7 OF 2000

(ON APPEAL FROM FCMC No 567 OF 1978)

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BETWEEN

Before: Hon Leong JA, Le Pichon JA and Cheung J in Court

Date of Hearing: 10 November 2000

Date of Judgment: 24 November 2000

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JUDGMENT

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Hon Leong JA (giving the judgment of the Court)

1. The petitioner/husband and the respondent/wife were divorced in 1979. On 12 July 1979, HH Judge Rhind of the District Court made a consent order relating to ancillary relief (the Rhind Order). The relevant part of the consent order for the purpose of these proceedings is this:

Upon hearing Counsel for the petitioner and Counsel for the respondent and by consent, it is ordered the proceedings be discontinued on condition that the parties sign the proposed agreement within 3 days and that there be no order as to costs.

 . . .  It is mutually agreed as follows:

 . . .

(d) with regard to the [ . . . ] Flat

(i) the petitioner will allow the respondent to remain thereat as a licencee until her marriage or upon her death whichever event may first occur;

(ii) the petitioner will continue to pay for the monthly mortgage repayments and rates therefor;

(iii) the petitioner will name [C] [the only child of the marriage] as his beneficial successor in respect thereof upon his death in accordance with the by-laws by Villa Piubello for Operative Building Society Ltd;

(iv) the respondent will give an undertaking to the petitioner not to violate or commit breach of any of the regulations imposed by the Government Housing Society and of any of the by-laws of Villa Piubello for Operative Building Society Ltd and to indemnify the petitioner of any damages as a result;

(v)  . . .

2. On 26 June 1984, HH Judge Caird of the District Court varied the Rhind Order in relation to periodical payments (the Caird Order). The new provision in this regard is this:

(1) the petitioner to pay to the respondent the sum of $10,700 per month for her support and maintenance until the respondent's remarriage or death, whichever shall be the earlier, the said sum to commence from 1 July 1984 and to be increased annually commencing 1 July 1985 by an increment of 13% per annum;

3. On 23 December 1996, the husband took out an inter partes summons to vary the Rhind Order as varied by the Caird Order in these terms:

(a) The respondent/wife shall continue to remain at the Flat as a licensee until her remarriage or upon her death which event may first occur first;

(b) The petitioner shall cease to be responsible for payment of the rates and/or management fees and/or maintenance or repairs and/or any other expenses in respect of the Flat;

(c) The Order for periodical payments to the respondent by the petitioner under para.(1) of the Second Order be either discharged or varied and that the amount payable to the respondent be decreased as to this Honourable Court shall deem fit; and

(d) There be no order as to costs.

4. It is clear from this summons that the husband intended that the arrangement regarding the [ . . . ] Flat was to remain undisturbed and what he sought was to discharge or reduce his liability on periodical payments which included payments for the maintenance of the Flat. Insofar as the wife was concerned she did not seek anything regarding the Flat other than what she had been given. It would appear that she was content with having a licence to remain in the Flat for as long as she remained unmarried and as long as she lived.

5. The matter went before Deputy Judge Winston Leung and on 30 April 1997, he made a consent order that the husband was to transfer his interest in the Flat to the wife and to pay the wife periodical payments for a fixed period of eight months from May 1997 to December 1997 at the rate of $20,000 per month and thereafter all the wife's claim for financial relief would stand dismissed.

6. As it happened, Government required payment of a premium before a transfer of the property in the Flat could be effected but the consent order made on 30 April 1997 made no provision as to whose liability it was to pay the required premium.

7. The husband appealed against the order of 30 April 1997. In January 1998, while the appeal was pending, Deputy Judge Winston Leung made an order that pending appeal, the monthly payment was reduced to $15,000. On 8 September 1998, the Court of Appeal set aside the order because without provision for payment of the premium, the order could not be carried into effect. The matter was remitted back to the Deputy Judge Winston Leung for reconsideration. In the meantime, the Rhind Order as varied by the Caird Order remained in force. That in effect means that the husband must continue making periodical payments to the wife in such sums as set down in para.1 of the Caird Order.

8. The monthly payments by the husband in the meantime were only in the amounts of $20,000 per month and according to the April 1997 Order, in the amounts of $15,000 during the period pending appeal pursuant to the January 1998 Order. There is a difference between these sums and that as calculated pursuant to para.(1) of the Caird Order, which is more because of the annual 13% increment.

9. The wife considered that the husband had failed to comply with the Caird Order and took out a judgment summons seeking to commit the husband to prison.

10. Deputy Judge Winston Leung heard the summons for variation and the judgment summons in concurrent proceedings in chambers and made the following orders on 21 October 1999:

(1) The periodical payment order under para.(1) made by His Honour Judge Caird on 27 July 1984 be varied and discharged with effect from 1 October 1999.

(2) The order dated 12 July 1979 para.(d) made by His Honour Judge Rhind be varied to the extent that paras.(d)(ii), (iii) and (iv) be discharged.

(3) The petitioner do transfer or cause to transfer all his interest, benefit and right in the Flat to the respondent as soon as practicable. For the avoidance of doubt it is declared that the obligation to remove the alienation restrictions by way of payment lies with the respondent. The legal costs of and incidental to the transfer be borne by the petitioner, including stamp duty, if any.

Liberty to apply regarding implementation.

(4) Judgment summons be discharged.

(5) Upon the execution of the order in para.3, which is meant for full and final settlement between the parties, all the claims for ancillary relief by each party against the other, including the respondent's claim for the arrears of maintenance, do stand dismissed.

(6) There will be no order as to costs for the proceedings including all costs previously reserved.

11. The wife appeals against this order.

12. The grounds of appeal in short are that the Deputy Judge had no jurisdiction to make the order regarding the transfer of the Flat and that the hearing of the judgment summons together with the summons for variation was an irregularity. In any case there was no finding as to the husband's means.

13. Mr Clough for the wife submits that the Deputy Judge only has power under s.11 of the Matrimonial Proceedings and Property Ordinance (Cap.192) (the Ordinance) to vary orders made under that Ordinance but that does not include the power to vary an order as to the transfer of property by one party to the marriage to the other or to a child of the family.

14. Ms Yew for the husband concedes that the Deputy Judge has no power to make the orders in this regard.

15. We agree that the Deputy Judge had no power to vary the Rhind Order on the [ . . . ] Flat. The fact is what was sought by the husband in his summons on 23 December 1996 was a confirmation of that part of the Rhind Order that the wife be allowed to remain at the property as licencee until marriage or death and a variation of the monthly payments including payments relating to the property. Transfer of the property was never an issue before the Deputy Judge. The Deputy Judge should not have made the orders concerning the property without giving the parties an opportunity to address the issue. The Deputy Judge could not of his own motion deal with a matter which the parties had not raised and with which he lacked jurisdiction to deal.

16. We note that it is not in dispute that neither party is financially capable of paying for the premium required by the Government to remove the alienations restriction imposed on the Flat. The Deputy Judge in para.3 of his order of 26 October 1999 put the obligation to pay on the wife despite her lack of means. We do not see how that paragraph can be carried into effect.

17. We agree that the manner in which the Deputy Judge dealt with the judgment summons is an irregularity. There must be a finding as to the husband's means and as to his ability to pay the judgment debt but the Deputy Judge had not reached any such conclusions. We are not in a position to perform this function for the Deputy Judge. In our opinion, the judgment summons should have been dealt with in open court after the variation summons was dealt with in chambers. The reason is if the husband became incapable financially to meet the periodical payments, because of a change in circumstances a variation of the order on periodical payments would become necessary. Before any such order is made, the Court would invariably have inquired into the husband's means and it might be the case that to proceed with the judgment summons would not serve any useful purpose.

18. In view of the above conclusion, the only course open to us is to set aside the order of 26 October 1999 and remit the matter back to another judge of the Family Court for the two summonses to be considered afresh.

19. We made a costs order nisi that the costs be to the wife.

Miss Lily Yew, instructed by Messrs TC Lau & Co for the petitioner

Mr Neal John Clough, instructed by Messrs Wong, Packwood & Co for the respondent