TL v. YSW also known as WSY

FCMC 13455 /2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 13455 OF 2011

----------------------------

----------------------------

-------------------------------------

JUDGMENT
(ancillary relief: husband)

-------------------------------------

Introduction

1.  In this trial, the 81-year’s old husband (petitioner) claims for ancillary relief against his 56-year’s old wife (respondent). He alleges that he had given substantial cash and shares to the wife before or during the marriage, which now forms the majority of the wife’s assets. Taking into full account of his advance age, he now seeks in his open proposal to share HK$16,970,000 out of the wife’s total assets of about HK$48 million upon conclusion of an almost 10-year marriage.

2.  There is no corresponding ancillary relief application made by the wife. However, she avers that the length of cohabitation was at the most 3 years, during which the husband barely supported her. She denies receiving any cash or shares from the husband. She further claims that her assets were either inherited by or given to her as gifts by her maiden family prior to or during the marriage, and that the parties have kept their finances separately all the times. Given the evidence elicited in the trial shows that husband has sufficient assets to cater for his own needs, the wife, at the stage of final submission, formally withdraws her open proposal of paying HK$1.75 million to the husband. It is now her case that the husband is not entitled to share her wealth to the extent that his ancillary relief claim should stand dismissed.

The marriage

3.  The couple first met in late 1980s and soon started courtship. They were married on 8 August 1997. On the wedding day, the husband was 65 and the wife 39.

4.  No child was born to this marriage.

5.  On 25 September 2011, the husband filed his petition for divorce on the ground of 2-year separation.

6.  Decree nisi was granted on 18 January 2012. But up to the date of this judgment, for reason(s) unknown to this court, neither party has applied for the decree nisi to be made absolute.

The husband

7.  The husband was born in 1932. His first marriage had failed but given him 5 daughters. He then developed an intimate relationship with his cousin and a daughter was born out of wedlock.

8.  A very successful businessman in the 1990s with good connections in China, the husband had extensive investment, including realty development, in his native county in MZ City, Guangdong Province. He was so wealthy and successful that he was able to donate well over HK$12.7 million to his native county back in the 1990s. As a result, he was awarded an honorary citizen of MZ City in 1994 and appointed a standing committee member of the political consultation conference (政協委員) of MZ City[1].

9.  Pausing here, I take note that during her final submission, Ms Lisa Remedios, counsel for the wife, disputes the husband had made donation of HK$12.7 million to his native county. However, this submission is in contradiction to the wife’s 4^th affirmation where she herself confirmed that over the years, the husband had frequently invested and “made donations” to his native county; she even went on to quote the husband’s 1^st affirmation about the HK$12 million donation[2]. Further, the husband is able to produce documentary proof to support his assertion[3]. The wife’s contention is not accepted.

10.  After marrying the wife, the husband’s investment in his native county grew more aggressive, in particular in the domain of realty development. However, his investment allegedly started to have a downturn since about 2001, and suffered huge loss during the SARS period in 2003.

11.  In/about July 2003, the husband decided and retired at the age of 71. He now lives with the youngest daughter in the Tung Chung property.

The wife

12.  The wife was born in 1957 and was never married before. She came from a large family of 12 siblings (3 sons & 9 daughters). Originated in Indonesia, her parents came to Hong Kong but sent their children back to China in the 1960s. She came to Hong Kong in/about 1966.

13.  Starting from about the 1980s, her parents ran a few companies. Most of these companies (except (1) and (3) below) were subsequently transferred to the wife’s 3 brothers upon the death of their parents. Of relevance to this trial are the following ones:

(1)  LYH Co Ltd

A trading company on food provisions whose shareholders as at 1996 were (i) YF Enterprises International Ltd (held by the 3 brothers) (5,100 shares) and (ii) a PRC-businessman, Mr MP Wong (4,900 shares). In 1998, YF Enterprises transferred all 5,100 shares to Mr MP Wong at nil consideration.

(2)  YSH Co Ltd

A property-holding company whose shareholders and directors were the 3 brothers. Its 2 properties, ie Po Garden and Wayson Building, were sold in January 2007 at HK$30 million and November 2007 at HK$3.55 million respectively.

(3)  BR Co Ltd

A property-holding company whose shareholders were the wife and her 11 siblings (each holding 1 share). Its 3 properties, ie Provident Centre, Dragon Terrace and TW warehouse, were sold respectively in July 1998 at HK$6.38 million, March 2002 at HK$3.85 million and October 2007 at HK$1,380,690.

14.  On the wife’s part, after completing her secondary education and working briefly for 1 to 2 commercial entities, she subsequently assisted her late mother/brothers in the office work of LYH Co Ltd, YSH Co Ltd and BR Co Ltd. She claims that she was not formally an employee of these companies, nor was she formally on the payroll. Her late mother nevertheless paid her HK$5,000 per month. Yet, in a statutory declaration made by her on 30 January 2007[4], she declared that she was the account manager of YSH Co Ltd since 1986. She now confirms in this trial that this part of her statutory declaration is wrong and she made this declaration just to do a favour to her 3 brothers for the purpose of facilitating the sale of one of the properties owned by YSH Co Ltd.

15.  Putting aside the discrepancy between her statutory declaration and her affirmation/oral evidence in court, I think the evidence is quite clear that the wife did assist her late mother and/or her brothers to handle office and accounts works of the family companies. For example, she gave instructions to the bank on renewal of her late mother’s fixed deposit of USD$529,780.61 (“我叫銀行做一天得一天”); she also received deposit(s) from the purchaser(s) on behalf of BR Ltd in the sale of its property.

16.  Apart from that, the wife has not been in any gainful employment since the marriage. She now lives alone in the One Silversea property registered in her sole name.

Applicable Law

17.  The law relating to the distribution of family assets in ancillary relief maters are set out in section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), Cap 192, which states,

“ (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.”

18.  The Court of Final Appeal in its landmark judgment of LKW v DD [2010] 13 HKCFAR 537 has enunciated 4 guiding principles as to how section 7 of MPPO should be approached, namely (i) objective of fairness, (ii) rejection of sex or role discrimination, (iii) yardstick of equal division, and (iv) rejection of minute retrospective investigation.

19.  It has further laid down 5-step approach as follows:

(1)  to ascertain the financial resources of each of the parties  calculated as at the date of the hearing;

(2)  to assess the financial needs of the parties;

(3)  to apply the sharing principle to the parties’ total assets (if surplus assets would remain after the parties’ needs have been catered for);

(4)  to consider whether there is/are good reasons for departing from the principle of equal division;

(5)  to decide the outcome.

20.  With above guiding principles in mind, I shall now turn to the fundamental issues.

Issues

21.  By an updated statement of agreed issues in dispute/scott schedule filed on 24 July 2013 (“Agreed Issues List”), Mr Paul Wu, counsel for the husband, and Ms Lisa Remedios, counsel for the wife, have listed out 12 factual issues for this court to determine. I do not propose to set out the Agreed Issues List verbatim in this judgment, but wish to make 3 preliminary points.

22.  First of all, the Tung Chung property registered in the joint names of the husband and his youngest daughter (issue 11) is no longer an issue, as both parties have already agreed that it is a matrimonial asset.

23.  Secondly, the court records show that in the PTR of 29 April 2013 (the husband represented by Mr Tsang, solicitor; the wife by Ms Remedios), the husband conceded that he had received HK$300,000 odd from the wife, being sale proceeds of shares once held by the wife on his behalf, but still averred that the wife was holding certain numbers of shares given by the husband to her (issue 3 (b)) and thus sought leave to file further affidavit, to which I allowed. The next PTR took place on 29 August 2013, when both parties were represented by a different counsel/solicitor (not Mr Wu and Ms Remedios now before me). For the records, I have not struck out issue 3 (b) due to what was discussed in the PTR of 29 April 2013.  

24.  Thirdly, for easier discussion and bearing in mind the aforesaid 4 principles set out in LKW (supra), in particularly the last principle of rejection of minute retrospective investigation, I am of the view that the following issues are more fundamental and relevant to the outcome of the section 7 exercise:

(1) What is the length of the marriage;

(2) Whether the wife’s assets were sourced from the husband or from her maiden family prior to or during the marriage;

(3) Whether the parties kept separate finances;

(4) Whether the husband has concealed any assets;

(5) What order for financial provisions should be made under section 7 of the MPPO.

Issue (1) : What is the length of the marriage

The husband’s evidence

25.  According to the husband, he married the wife in August 1997 in Las Vegas, despite the objection of the wife’s maiden family. Except for the 1^st year of marriage when the husband asked the wife to stay with her mother (who was then in her terminal stage of liver cancer), the couple had physically lived together as husband and wife up to May 2007 when they started to live separately but under same roof. The marriage up to separation thus lasted for 9 years and 9 months.

26.  The following table gives a summary of the places where the husband says they had lived since their marriage (in chronological order):

Period	Property
8/1997 – 1998	Wife living with her mother to take care of her.
End 1998 – End 1999	Island Place (rented)
End 1999 – about 7/2000	Tannar Garden (rented)
About 7/2000 – about 6/2003	City Garden (purchased in husband’s sole name)
About 6/2003 – about 2/2004	The Metropolis (purchased in wife’s sole name)
About 2/2004 – about 12/2006	The Sorrento (purchased in wife’s sole name)
About early 2007–about 5/2007	One Silversea (purchased in wife’s sole name)
About 5/2007 – about 8/2011	Separated but still under same roof at One Silversea
About 7/2011	Husband moved out from One Silversea to Tung Chung property (purchased in joint names of the husband and his youngest daughter)

27.  Further, the husband claims in his oral evidence that since the marriage up to the separation, he had been paying HK$10,000 - $15,000 per month (save at the Metropolis when he paid only HK$5,000-$6,000) to the wife to cover household expenses.

The wife’s evidence

28.  According to the wife, the husband took her to Las Vegas where she married him reluctantly. Here is how she describes her marriage to the husband[5]:

“7. In early 1997, the [husband] proposed that we get engaged. However, I did not manage to make up my mind on whether I should marry the [husband] or not, as the members of my maiden family did not want me to have any relationship with the [husband] due to our large age difference.

8. In May 1997, the [husband] invited me to visit his daughter S in the USA so that he could introduce her to me.

 9. However, to my surprise, the [husband] had in fact already secretly made arrangements to marry me…when we arrived at Las Vegas, I found out that the [husband] had in fact arranged for us to get married at a chapel. In the circumstances, I reluctantly married him in Las Vegas…Although I had not really decided at that point to marry him yet, I was put on the spot at that time and I reluctantly went through with the ceremony in haste.”

29.  She says that immediately upon return from Las Vegas, the husband told her to live with her mother as he wished to continue to live with his father “without her”; he did not even tell her his exact address nor introduce her to his family.  It was only upon her complaint in end 1998/early 1999 that the husband rented Island Place and Tanner Garden respectively for her to live in. Yet, she lived in these 2 apartments very briefly before she moved back to live with her mother again, as the husband rarely came to see her. The husband paid for the rent, rates and management fees only but not her daily living expenses[6].

30.  In September 2000, the husband finally invited her to live at City Garden and paid her HK$3,000 per month for household expenses and food; but such payment stopped abruptly after a few months without a reason. Since early 2003, the couple had frequent quarrels and she was “frequently assaulted” by the husband[7]. She says under cross examination that the husband “often hit or scolded at her; did not give her face and did so in public place or in front of his daughter”. In/about May 2003, he “unreasonably evicted” her[8] or “compelled [her] to move out without any reason”[9].  As a result, she moved out from City Garden in July 2003. She says that the parties separated since then. The marriage thus lasted for less than 3 years.

31.  Between September 2005 and July 2011, however, she accepted the husband’s request to let him live as a lodger, free of rent, at her place, first at The Sorrento and then at One Silversea. She did not require him to make any contribution to the utilities expenses and maid expenses. She explained that she felt sorry for him because he was very old and had nowhere to stay.

32.  In/about July 2011, after yet another heated argument, the husband removed all his belongings and left One Silversea.

Discussion

33.  When considering the length of marriage, one has to bear in the mind the personal background of this particular pair of couple. There is a marked and huge gulf in age (of 25 years) between them. The husband was a divorcee with 6 daughters but the wife had never married before.

34.  Set in the above background, it is, in my view, starkly contrary to common sense and inherently implausible (and thus not capable to be believed) of the wife’s case that the husband, having literally “lured” her to go to Las Vegas and surprised her with pre-arranged chapel and other wedding arrangement, as a result of which she reluctantly married him, would make a sudden and unexplained 180 degrees’ turn in attitude immediately after the marriage by rejecting to live with and take care of her. It is equally inherently implausible of her case that the husband, who was finally able to live with his young wife at City Garden in 2000, would often scold and assault her, and eventually compelled her to leave without a reason. On the contrary, given the wife’s relative young age and her “pure” marriage history, the husband should be regarded as very lucky to have her marrying him. It would only be natural and logical to conclude that he would try his best to adore and appease his young wife in so far as his ability, including financial ability, could do so.

35.  And, in my judgment, it is quite clear that the husband did possess the financial ability to support his wife comfortably, at least before 2003. Here, I take note of Ms Remedios’ submission that the husband is giving new evidence at trial when he says that he gave HK$10,000 - $15,000 per month to the wife during their marriage. I do not agree. The husband has already mentioned in his affirmation that after the marriage, he often gave the wife sums of money in terms of tens of thousands “as living expenses” [10].

36.  It may well be true that there was a period of about a year or so (August 1997 to 1998) when the couple did not live physically together, but I would accept the husband’s evidence that it was due to his suggestion that the wife should stay with her sick mother to keep her accompanied and the wife agreed to this arrangement. It may also well be true that during the time when the husband rented Island Place and Tanner Garden, he had to spend time in China for his business and thus did not come home to the wife every day. But it is quite clear that the husband’s business necessitated this arrangement. The wife did not see this arrangement detrimental to their relationship, or else she would not have gone to live with him in the City Garden thereafter. In all respects, this was the way the parties chose to live at that time.  I fail to see why and how this period should not be counted as part of the duration of their marriage.

37.  It is also illogical of the wife’s case that despite their separation under the circumstances alleged by her at §[30] above, she would allow the husband to accompany her to view potential apartments at the Metropolis, and later to sign the preliminary sale and purchase agreement of the Sorrento.

38.  Beyond dispute is that the parties lived under the same roof at The Sorrento and One Silversea respectively from September 2005 to about July 2011, during which the husband was not required to pay any rent, utilities charges and maid expenses to the wife. The case law is clear that a couple would not be regarded as “separated” or “living separately” unless it can be proved that they were actually living as 2 households and that there was no longer a voluntary partnership in which mutual emotional, economic and general support was provided. The burden of proof is on the wife (not the husband) and the burden is a heavy one (See: PLTO v KLK [2013]2 HKLRD 1089 at §§51-60; EJB v CJB [2011] 5 HKLRD 508 at §90).

39.  Upon considering all evidence, I do not find the wife has successfully discharged this burden. She tried hard to paint a picture that the husband was unloving, irresponsible and even brutal. If all these bear any truth, it cannot be understood by a reasonable man why she would allow this husband, or in the words of Mr Wu “a daily nuisance”, to stay as a lodger wandering around at her place at the Sorrento and One Silversea respectively for almost 6 years.

40.  Her attempted explanation that she felt sorry for the husband that he was then so very old but without a place to stay does not sit well with her allegation and her counsel’s final submission that the husband had concealed an unknown amount of assets, including but not limited to the investment at his native county and the sale proceeds of his office at Wayson Building.

41.  Ms Remedios in her submission relies on the English case of Fuller v Fuller [1973] 2 All ER 650. In Fuller, the wife left the husband and lived with another man as his wife for 4 years. However, the husband then became ill and on discharge from hospital moved to the wife’s house where he lived as a lodger paying a weekly sum for 4 years. Lord Denning MR held that in this situation, the parties were not living with each other as husband and wife. However, the facts of Fuller is distinguished from ours, since the wife in our case has not lived with another man, nor has the husband paid any rent, utilities charges or maid expenses to the wife.

42.  Ms Remedios also reminds me that the husband did not dispute the “lodger” allegation in any of his written affirmations until trial. I will have the following observations to make:

(1) as the PLTO v KLK (supra) says, the burden of proof rests squarely on the wife to show that though they were living under the same roof, they were maintaining 2 separate households. I have found that the wife has failed to discharge this burden;

(2) it needs to be pointed out that even in her own 2 Form Es, the wife described One Silversea as the matrimonial home, which is clearly not in line with her “lodger” allegation;

(3) it has always been the husband’s case that the couple separated in May 2007 (not 2003 as alleged by the wife) and thus it goes without explicit saying that he rejects the allegation of being a lodger at The Sorrento and One Silversea;

(4) even if (just assuming) that the husband for the first time denies the “lodger” allegation only in this trial, the wife has been offered sufficient chance to reply to this allegation during the trial, eg the case was adjourned early in the 1^st day of the trial upon conclusion of the examination in chief of the husband’s evidence so as to allow Ms Remedios to take full instructions from the wife. No material prejudice is thus caused to the wife.

43.  To conclude, on totality of the evidence, I reject the wife’s evidence but accept the husband’s evidence on the length of their marriage and circumstances of their cohabitation, as well as the husband’s contribution to the household expenses to support the wife. I find as facts that the parties did live as husband and wife up to about May 2007, when they separated into 2 separate households. The marriage, in my judgment, lasted for 9 years and 9 months, and should be regarded as a long marriage.

Issue (2) : What is source of the wife’s assets

The husband’s position

44.  According to the husband, before their marriage, the wife asked him “to guarantee her livelihood after the marriage”, to which he readily agreed. He thus set up a shares account with Tai Fook Securities for the wife under her name and paid her not less than HK$5 million ($3 million shares and $2 million cash) prior to the marriage.

45.  After their marriage, he gave the wife his shares portfolios at Tai Fook Securities by signing an authorisation letter dated 30 December 1997[11] in her favour allowing her to deal with his share account, including selling his shares (estimated to worth about HK$6 million in 1998) or withdrawing funds from his Tai Fook Securities account (with margin limit up to HK$4 million in 1996). He alleges that the wife is still keeping some of his shares in her Tai Fook securities account now.

46.  In/about 2000, he purchased and paid for the purchase price of Shenzhen Flat 801 and the down payment of Shenzhen flat 802. Both flats were subsequently transferred into the sole name of the wife. Further, due to delay in completion, the wife received 2 car parking spaces and RMB$200,000 as compensation.

47.  In the husband’s case, all the assets now enjoyed by the wife came from 3 sources:

(1) His cash gifts to her before and during the marriage;

(2) Proceeds of sale of Shenzhen Flats 801 and 802, and 2 car parking spaces;

(3) Shares sold from his Tai Fook Securities account or transferred to the wife’s Tai Fook securities account.

The wife’s position

48.  It is the wife’s case that her maiden family was very rich and that she received over HK$20 million by way of cash gifts given by her late mother or the 3 brothers prior to or during the marriage as follows:

Prior to marriage
On/about 27/12/1995	US$957,002.47
On/about 5/5/1997	US$751,921.68
Sub-total:	US$1,708,924.14 (or HK$13,329,608.37)
After marriage
On/about 5/12/1997	US$529,780.61
On/about 1/12/1999	US$750,816.18 *
On/about 10/4/2002	HK$1,560,000
On/about 1/2/2007	HK$1,050,000
On/about 2/5/2007	HK$300,000
On/about 3/8/2008	HK$355,000
Sub-total:	US$529,780.61 HK$3,260,000 (or HK$ 7,392,288.76)

* This was a fixed deposit placed by the wife’s late mother in the name of the wife and her brother, F. The wife says that she subsequently made no claim to her share on its maturity in February 2000 and the whole sum was eventually received by F.

49.  The wife is adamant in saying that she used these cash to invest in shares, foreign currencies or landed properties, including but not limited to the Metropolis and Shenzhen Flats 801 and 802.

50.  She denies holding any of the husband’s shares now at her Tai Fook Securities account.

Whether the wife received gifts in huge cash from her mother/brothers prior to or during the marriage

51.  To begin with, I take note that apart from the said HK$20 million cash gifts, the wife has not claimed that she owned other substantial asset prior to the marriage, nor has she claimed that she was given any dowry by her maiden family. 

52.  According to the wife, she received 3 very large sums of USD cash gifts totalling US$2,238,704.75 (over HK$17 million) between 1995 and 1997 from her late mother, of which US$1,708,924.14 (over HK$13 million) was given to her prior to her marriage.

53.  In order to support her claim that her late mother/maiden family was very rich, so rich that only she alone, among 12 siblings, was gifted with over HK$17 million for just within 2 years, she alleges at trial that her late father was very wealthy and ran very big businesses in Hong Kong even before LYH Co Ltd was set up. Yet she is unable to elaborate on what big businesses her late father participated. This bare assertion of hers does not fit well with her own oral evidence that her parents had to send her/her siblings back to China to stay at government-provided residences for overseas-chinese-refugees (難僑) in the early parts of 1960s, instead of raising them in relatively safe and prosperous Hong Kong.

54.  She further claims under cross examination that the annual business turn-over of LYH Co Ltd in the 1990s was HK$150-300 million per year and the yearly net profit was about 7-8% of the turn-over. The average yearly net profit would thus be about HK$14 million, of which her maiden family would share about HK$7 million per year. However, I agree with Mr Wu for the husband that it betrays commercial sense for her maiden family to have transferred the shares of LYH Co Ltd to Mr MP Wong at nil consideration in 1998 if it was consistently earning a net profit about HK$14 million per year.      

55.  The alleged 3 sums of USD cash gifts of over HK$17 million represent more than 2 years of her family’s share of the alleged net annual profit of LYH Co Ltd. One of such sum (USD$751,921.68) is, according to the wife, the fixed deposit returned to her late mother upon her/her family’s withdrawal from LYH Co Ltd. The wife is unable to explain why she, among the 12 siblings, was fortunate enough to have received such huge cash gifts from her late mother.

56.  One should find it strange and unexplainable that the wife was, nevertheless, not given any beneficial shareholding of LYH Co Ltd or YSH Co Ltd. She is not named a beneficiary in her late mother’s will, either. Her mother left all her estate to the 3 brothers only.

57.  It is also noteworthy that her brother F (who is a witness of this trial), having allegedly so willing and ready to give up his half share of the cash gift of USD$957,002.47 in December 1995 in favour of the wife[12], still lives in a rented property as at trial. He has refused to disclose his financial position to this court. I conclude that no weight should be placed on his evidence.

58.  I have not lost sight of Ms Remedios’ submission that the wife is able to produce contemporaneous documents to prove that she had received these cash gifts from her mother or her brothers[13]. I have considered these documents carefully in the light of all evidence in this case. In my judgment, these documents are not conclusive evidence. Firstly, the wife’s own evidence shows that her late mother would place fixed deposit in the name of one sibling, but would allegedly transfer the fixed deposit to another sibling on its maturity. The fixed deposit of USD$1,467,731.68 is an example. Secondly, the wife was involved in the office work and accounts of the family companies, including giving instructions to the bank on renewal of her late mother’s fixed deposit (See §[15] above). Thirdly, despite the wife’s admission under cross examination that she has the habit of keeping her bank and shares records, she has not provided any documentary proof in respect of the fund flow of all the USD cash gifts received by her. She simply resorts to the convenient excuse that the same has already been misplaced. Her bank account with Nanyang Commercial Bank under account no. 043-XXX-688, into which over HK$17 million was deposited, is never disclosed in any of her Form Es or affirmations. In a nutshell, she is unable to show that the money stayed with her.

59.  Further, some of these documents cannot stand up to scrutiny and/or are in stark contradiction to the wife’s own evidence. The following are some of the more obvious examples.

60.  The wife deposes in her affirmation that a sum of USD$957,002.47 was the sale proceeds received by her mother when she transferred her properties to BR Ltd in/about May 1992[14]. Her mother then made this sum a fixed deposit under the joint names of the wife and the younger brother F who subsequently made no claim to his shares. She relies on an exchange memo[15] showing that a sum of HKD$7,403,371.13 was transferred by way of T/T and exchanged into USD$957,002.47 on 27 December 1995. First of all, it is odd and unexplained that the cash gift would be presented in USD when the money was originally in HKD. Besides, her affidavit evidence contradicts with her oral evidence in court when she tells this court that the exchange memo represented T/T payment sent by her eldest brother (domiciled in Indonesia) from Indonesia to her mother who decided to name the wife and F as the recipients. She agrees in the witness box that this exchange memo might be related to the business of LYH Co Ltd. She is unable to provide any explanation on this material discrepancy between her affidavit evidence and her oral evidence in court. 

61.  The wife alleges that a sum of HK$1.56 million was paid to her by her brothers as bonus and her entitlements in BR Ltd[16], among which HK$120,000 was her bonus; HK$360,000 was her entitlement to the dividends; and HK$1.08 million was a gift to her by her brothers on an ex-gratia basis[17]. She produces 3 cheques all dated 10 April 2002 and some bank pay-in slips to support her case[18]. It is pertinent to note again that BR Ltd is simply a property-holding company. The most recent property transaction that would allow bonus, dividends and ex-gratia payment be made to the wife would be the sale of Dragon Terrace in March 2002 at HK$3.85 million. When asked why she would be entitled to about ¼ of the sale proceeds among 12 siblings (bearing in mind that she only owned 1 share out of 12), she resorts conveniently to the excuse that the money was the inheritance given to her by her late mother but was safe-kept by the 3 brothers until her mother’s death. This explanation is in blatant contradiction with her earlier oral evidence that her mother had made a will to leave her estate to the 3 brothers only. Further, there is no corresponding bank pay-in slip for the said sum of HK$1.08 million. The exchange memo/customers’ advice relied on by the wife was dated 8 December 2003, which post-dated the relevant cheque by more than 1.5 years; it is common knowledge that a cheque would only be valid for 6 months upon its issuance. As such, whether this amount of HK$1.08 million was ever cashed into the wife’s bank account remains doubtful.  

62.  Looking at the wife’s allegations from another perspective, one cannot help asking this question: if the wife was really and already so rich before she was married to the husband, couple with her relative youth and “pure” marriage history, why would she want to marry, or in her case, reluctantly made to marry, a 65-year old divorcee with 6 daughters whose financial ability, she claims, was then unknown to her, and who, immediately upon marriage, refused to live with her and supported her? She has not said in her evidence that she married the husband out of love to him.

63.  Having considered the totality of all evidence, I refuse to place any weight on the wife’s documents in relation to the said 3 cash gifts of USD (of over HK$17 million) and to another cash gift of HK$1.56 million, nor do I believe her evidence that she received these sums of cash gifts from her maiden family. As she fails to show to my satisfaction that these moneys stayed with her, couple with her role in the family companies, it is more probable than not that the wife was used, as Mr Wu puts it in his final submission, “a mid-way station for asset-parking temporarily”.

64.  At the most, I am prepared to accept that the wife received a sum of HK$1.05 million, HK$300,000 and HK$355,000 given by the 3 brothers to her from 2007 to 2008. She supplements in witness box that these moneys were given to her in recognition of her service provided to the 3 brothers/YSH Co Ltd, or disbursement/reimbursements of miscellaneous spending. I am of the view that the sums of HK$1.05 million and HK$300,000 received by the wife during the marriage should be regarded as matrimonial properties. The last sum of HK$355,000, however, was gifted to the wife in August 2008 (ie about 15 months after their separation). Fairness dictates that this sum should be regarded as the wife’s unilateral asset and should not be counted as a matrimonial asset for distribution.

Whether the husband had transferred money/shares to the wife prior to or during the marriage

65.  In her submission, Ms Remedios says that the husband’s evidence should not be believed. She argues that the husband has failed to produce a single shred of documentary evidence such as deposit slips to substantiate his claims that he had made cash gifts to the wife.  She stresses with much expansion in her final submission that the husband has given a lot of new evidence in the trial which he has failed to mention in any of his affirmations or answers to questionnaires, despite that ample chance was made available for him to do so[19]. For example, he gives new evidence for the first time in the trial that he had given no less than HK$5 million casd/shares, to the wife prior to the marriage.

66.  There are other examples in Ms Remedios’ final submission, but I do not propose to name them all in this judgement. Suffice to say is that I have considered them all before I come to the conclusion appearing below in this judgment. 

67.  I would begin by saying that given my finding on the length of the marriage, I take the view that it does not make any material difference in the section 7 exercise as to when, ie whether it was before or during the marriage, the husband transferred his assets to the wife; the ultimate question is: whether the husband had ever made any transfer of his assets to the wife before or during the marriage. This of course turns on the credibility of the husband.

68.  While it is true that the husband is unable to produce any documentary proof of his transferring large amount of cash to the wife in the 1990s, I accept his reasonable explanation that it is not possible for him to get hold of deposit slips or bank records of over a decade ago. My overall impression of the husband is that he is an honest and truthful witness. It does not occur to me that he is a calculating person so that he would keep such documents in contemplation that the same might be of use in any planned divorce litigation in the future. After all, I do not think many people would, like the wife of this case, have the habit of keeping bank records which span back to almost 18 years ago. 

69.  Leeway should be allowed, when considering the husband’s evidence, for his advance age (at 81) and that he was being asked to recall events that took place more than a decade ago. Minor mis-recollection, such as whether his solicitors had interpreted the content of his affirmations to him, is not impossible and does not, in my view, undermine his credibility.

70.  Further, it is pertinent to point out that the husband speaks with an accent which is sometimes difficult to comprehend. In fact, there have been occasions during cross examination that the husband’s oral evidence was not understood at once due to his accent, so that clarifications or repetition of what he has said was required. Misunderstanding in communication between the husband and his solicitors is not something moon-shining.  

71.  In assessing the credibility of the husband, I think helpful assistance can be gleaned from the judgment of Chung J in Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd, HCA 3523/2002 (Judgment dated 13/08/05), where the learnt judge explained the appropriate test on credibility of witnesses:

“12. The assessment of a witness’s credibility and/or reliability is a task frequently undertaken by the court in litigation (in fact, very often an essential task). I consider the following to be the appropriate test to adopt:-

‘There are two objective tests for assessing a witness’s credibility regarding a matter to which he has testified:-

(a) whether that part of his testimony is inherently plausible or implausible;

(b) whether that part of his testimony is, in a material way, contradicted by other evidence which is undisputed or indisputable (an example often given of such evidence is contemporaneous documents).

Further, where it is shown that a witness has been discredited over one or more matters to which he has testified (using the above tests), this fact is relevant to the assessment of his overall credibility.  Likewise, regard may be had to a witness’s motive for deliberately not giving truthful testimony.  For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest.’”

72.  Hence, the fundamental question is not whether the husband has given, during the trial, so-called “new” evidence on his cash or shares gifts to the wife prior to or during the marriage; rather, the ultimate question to ask is whether the husband’s evidence is inherently plausible or implausible, and/or whether his evidence is contradicted in a material way by other undisputed or indisputable evidence.

73.  In my view, the evidence is clear that at all the material times prior to or immediately after the marriage in the 1990s, the husband was a very wealthy businessman (See §[8] above). He certainly had the ability to support the wife financially or to safeguard her livelihood by paying her tens of thousands or in million prior to or immediately after the marriage, and there is no reason under the circumstances of this case that he would refuse to do so.  

74.  In addition, it is undisputable that the husband signed a letter of authorisation in favour of the wife giving her very wide power to deal with his securities account with Tai Fook Securities. The wife has not challenged the husband’s evidence that the margin limit allowed to him, which should be somehow proportionate to the total value of shares in his securities account, was HK$4 million as at 1996.  It is thus not inherently implausible that when the said authorisation letter was signed in favour of the wife, the husband’s securities account had total shares worth of about HK$6 million, for which the wife, armed with the said authorisation letter, was free to deal with.

75.  Since I have found that the wife had not received any USD cash gifts from her late mother prior to or during the marriage, it becomes even more inherently plausible of the husband’s case that he had given the wife substantial assets, be it in cash or shares, in million before the marriage as well as in tens of thousands or millions immediately after the marriage. I repeat my analysis in §§[51] to [64], in particularly §[51].

76.  As a matter of fact, I think the wife has made a very telling response under cross examination[20]. In order to provide a reason for why she did not simply reject marrying the husband in Las Vegas, she claims that the husband told her that he loved her so much that he could not do without her (“無我唔得”) and promised her that he would take care of her after the marriage (“婚後會照顧我”). When asked if and, if so, what other good point(s) that the husband possessed, she said he treated her very well at that time (“佢當時對我好好”). When asked how well the husband had treated her and if that included giving her assets, she categorically denied, but was evasive on elaborating on how well the husband had treated her.

77.  Having considered all evidence including observing the demeanour of the witnesses in witness box, I accept the husband’s evidence that he gave at least HK$5 million cash/shares to the wife prior to the marriage, as well as his share portfolios in Tai Fook Securities (worth about HK$6 million) and tens of thousands to a million from time to time during the early years of their marriage. I have already found earlier in my judgement that the wife did not receive any cash gifts of USD from her maiden family and that she received only a total of HK$1,705,000 from her brothers between 2007 and 2008. Therefore, the only logical conclusion (and thus my finding) would be this: the wife’s assets now in her pot (except the cash gift of $355,000), including the shares portfolios now in her Tai Fook Securities account, must be sourced from the husband’s assets, be it given to her in cash or shares prior to or during the marriage.

Other Issues relating to landed properties

78.  In the Agreed Issues List, the parties state that there are issues relating to:

(1) whether the husband had contributed parts of the sale proceeds of City Garden (purchased in his sole name) as the down payment of the Metropolis (purchased in the wife’s sole name) (issue 7);

(2) whether the husband provided for the full purchase price of Flat 801 and down payment of Flat 802 (both in the wife’s sole name)(issues 4-6).

79.  Given my findings so far, I do not think it is necessary for me to consider these 2 issues in depth. But for completeness, I will point out the following.

80.  In relation to the down payment of Metropolis, I only need to say that the Metropolis, in my judgment, was the matrimonial home of the parties between June 2003 and February 2006, and thus the factor of source of contribution plays a minimal role. Even if (just assuming) the husband had not applied any sale proceeds of City Garden as the down payment of the Metropolis, the wife must have paid its purchase price by the funds given by the husband, as I have found that she did not receive any cash gifts from her maiden family prior to 2007.

81.  By way of background, Shenzhen Flat 801 was purchased during the marriage when the husband and wife were living together at City Garden at RMB$2,231,910. It was originally purchased in their joint names, but was later transferred to the sole name of the wife on/about 25 September 2001. Flat 802 was originally purchased in the name of the husband’s daughter, S, holder of USA passport, at RMB$1,783,440. The husband had made down payment for S (RMB$533,440) and it was planned that the balance of the purchase price would be paid by S by securing a mortgage with a bank in China. However, due to change of policy, S was not able to obtain the mortgage. As a result, Flat 802 was transferred into the name of the wife on/about 24 April 2002. Due to delay in completion, the wife received compensation of RMB $200,000 and 2 car parking spaces for free from the developer in 2004. She used the said RMB$200,000 for partial discharge of the mortgage of Flat 802. The 2 flats and 2 car parking spaces were all sold in 2007 and 2010 respectively. The sale proceeds are now kept at the wife’s PRC bank account.  

82.  The husband says that he paid the price of Flat 801 in full and the down payment of Flat 802, to which the wife never repaid him. The wife, however, relies on 16 exchange memos/customer’s advices[21] to show that she paid the said purchase price to the husband in full.

83.  In my judgment, it is abundantly clear that Flats 801 and 802 were purchased during the marriage when, even according to the wife’s case, the parties were living as husband and wife. My findings above also show that the wife’s source of asset, at least prior to 2007, is from the husband. That being so, even if it was the wife who subsequently repaid the said purchase price to the husband,  her money must have come from the assets given to her by the husband. It is a joint investment by making use of the matrimonial fund, and any sale proceeds of or compensation arising out of it must be viewed as matrimonial assets.

Issue (3): Whether they kept separate finances

84.  In her final submission, I have asked Ms Remedios this question: if I ruled for the husband on the length of marriage to be one of almost 10 years, would the wife still maintain that the husband is not entitled to any share of her wealth at all? Ms Remedios replies in the affirmation on the ground that the parties were independent in their finance.

85.  The issue of separate finances is not a factor that the court is expressly required to take into account under section 7 of the MPPO. It is however a concept that often goes hand in hand with other arguments relating to the length of the marriage and pre-marital assets, which I have already sufficiently dealt in the earlier parts of my judgment.

86.  Given my findings in this judgment, it must be the case that the family’s personal and financial interdependence had grown to such an extent that it was difficult to disentangle what came from where.

Issue (4) : Whether the husband has concealed any assets

87.  Ms Remedios submits in her final submission (§§155-160) that the husband has failed to produce any documentary evidence to support his claim that he had spent at least HK$1 million, being HK$300,000 from the sale proceeds of City Garden and HK$700,000 from the sale proceeds of Wayson Building, on the investment in his native county. He has failed to produce any paper to show that his investment in his native county had suffered huge loss. She concludes that the husband had concealed an unknown amount of assets.

88.  However, I accept the husband’s evidence that due to the lapse in time, he has misplaced the papers relating to his investment in his native county. After all, it is undisputed that the husband has retired for 10 years by now. The fact that he had to sell City Garden around the SARS period in 2003 at a loss in million shows more probable than not that his investment in his native county was not doing good; otherwise, he would not have to sell it at a loss. The wife has not, on the other hand, provided any positive evidence that can rebut the husband’s evidence. Quite on the contrary, it is her evidence that she had to advance a loan of HK$1 million to the husband’s company called Kin Wing Trading Company on 13 December 2000, which she used to set-off with the purchase price of Flat 801 at an agreed exchange rate[22]. On balance, I accept that the husband’s investment in his native county ended up in a huge loss and that he has not concealed any asset relating to this investment.

89.  Ms Remedios further submits that there were unexplained withdrawals in the total sum of HK$279,030 from the husband’s bank accounts between October 2010 and October 2011 (§§161-166 of her final submission). She invites me to draw the inference that the husband must have kept other undisclosed bank account(s) to keep this money.

90.  In my view, the submission of Ms Remedios has not taken into account that according to the husband’s evidence (which I accept), not all his spending was paid by his credit cards; he also used cash to settle some of his expenses. He needs to settle his lawyer’s bill(s) as well. Besides, the withdrawal pattern (withdrawal amount ranging from HK$3,000 to HK$70,000 over a period of 12 months on average of HK$23,000 per month) does not seem to be in accord with withdrawal pattern for the purpose of dissipation of assets. I do not find any abnormality in respect of this amount of HK$279,030.

91.  On the other hand, Mr Wu, in his final submission, does not seem to seriously objects to Ms Remedios’ submission that the husband has failed to account for the whereabouts of the net sale proceeds of his shares in the total estimated sum of HK$404,690 (see her final submission at §§167-176). In the premises, this amount of HK$404,690 will be added back to the matrimonial pot. However, I will not go so far as to conclude that the husband had deliberately concealed his assets.

Issue (5) : What kind of financial provision order to make under section 7 of the MPPO

Identification of assets

92.  At the beginning of the trial, counsel for respective parties have helpful set out in a joint financial statement the assets of both parties. Given my findings at [91] above, the net sale proceeds of the husband’s shares in the total estimated sum of HK$404,690 will be added back into the matrimonial pot. I remind myself that at this stage, there is no need for me to distinguish between matrimonial and non-matrimonial assets.

93.  I conclude that the parties’ assets come up to HK$50,236,614.40 set out more particularly as follows:

	Husband	Wife
Tung Chung property (50%) (net value)	$1,784,820.06	---
One Silversea property (net value)	---	$21,837,939.46
Cash in bank	$18,874.59	$6,650,054.88(RMB) $195,598.27
Shares	$260,580.60	$18,803,494.05
Add back: Sale proceeds of shares	$404,690	---
Less: Liabilities	Nil	$1,448,451.78
Total Net value	$2,468,965.25	$6,650,054.88(RMB) $39,388,580 (Total:$47,767,649.15)

Financial needs of the parties

94.  The financial needs of the husband are challenged by the wife in the trial. The main contention is that the husband’s expenses are excessive and that only ½ of the monthly mortgage repayment of Tung Chung property should be counted as his expenses (the remaining 50% should be borne by the youngest daughter). Ms Remendios submits that the husband’s reasonable and true expenses should be HK$12,233.98 (§55 of her final submission). The wife’s financial needs are not challenged by the husband in this trial.

95.  Ms Remedios has set out in great details the wife’s projection of the parties’ financial needs by adopting the same methodology of the Duxbury expert (see her final submission at §§57-90 [husband] & §§103-129[wife]).

96.  I do not find it necessary to analyse the financial needs of this couple items by items, for no matter this court accepts the wife’s contention or the husband’s contention on the financial needs, the total assets of this case are clearly more than sufficient to cover their needs. 

Deciding to apply the sharing principle

97.  I have decided above that there are surplus assets for distribution after the parties’ financial needs have been catered for. The law is clear that unless there are good reasons to depart from the equal sharing principle which is a fact determining exercise, this Court should use this as a yardstick to achieve a fair financial outcome for the parties.

Any good reasons for departing from equal division

Source of assets as a factor

98.  In LKW (supra), Ribeiro PJ, held that:

“ E.5.a Source of assets as a material factor

87. The source of an asset may provide a reason for excluding it from the sharing principle on the basis that it is not an item of matrimonial property.  Of course, in many cases, no question of any distinction between matrimonial and non-matrimonial property will arise.  But where there are assets which may be capable of being so differentiated, s.7(1)(a) implicitly requires the court to consider whether any part of such assets ought in fairness to be excluded from the sharing principle.  Differentiation might also be seen as a requirement of s.7(1)(f) if the source of a particular asset suggests that it is an independent and unmatched contribution by one of the parties.”

99.  Ribeiro PJ at paragraph 89 identified the two classes of assets which may be excluded on the basis of source.  The first involves property acquired during the marriage by one of the parties from a source wholly external to the marriage, such as by gift or inheritance.  The second involves assets derived from a business or an investment conducted solely by one party (sometimes called ‘unilateral assets’).

100.  However, the importance of source of the assets will diminish over time, as Baroness Hale in Miller v Miller and McFarlane v McFarlane [2006] 2 AC 618 explains, as the family’s personal and financial interdependence grows, it becomes harder and harder to disentangle what came from where. In LKW (supra), Riberio PJ concludes,

“93. So where it is a short marriage, the court may well be inclined to regard as excludable non-matrimonial property, assets acquired by one of the parties before the marriage or acquired in the course of the marriage from some wholly external source. But after a long marriage, those factors are likely to have much less weight.”

101.  Given that my above findings on the length of marriage and the wife’s source of assets, I am of the view that this factor does not warrant a departure from the equal sharing principle.

Conduct as a factor

102.  In LKW (supra), it is stated that conduct to be considered as a reason for departure of the equality principle must be “obvious and gross” which would be in the opinion of the court inequitable to disregard. Since neither counsel has made any submission on this point, I do not propose to consider this factor.

Financial needs as a factor

103.  The husband, now at the age of 81, has long retired and cannot be viewed as having any earning capacity. The wife, on the other hand, has not been in any gainful employment since the marriage. It is thus fair to say that neither party seem to have any meaningful earning capacity. Since there are surplus assets for distribution, I do not think financial need is a good reason to depart from equal division in this case. 

Duration of the marriage as factor

104.  I repeat my analysis and my finding that the marriage lasted for almost 10 years. It is a long marriage and thus there should not be any departure from the equal sharing principle due to this factor.

Contributions to the welfare of the family as factor

105.  On the whole, I take the view that the contribution made by the respective parties to the welfare of the family are about the same. The authorities are clear that there should not be discrimination in sex or role between a husband and a wife; and that there should be no bias in favour of the money-earner and against the home-maker. I conclude that contribution to the welfare of the family does not constitute a good reason in this case for departing from the equality principle. 

Compensation as a factor

106.  Both counsel are silent in their submission on this factor and thus there is no need for me to consider it here.

Deciding the outcome

107.  This childless marriage is a long one lasting for almost 10 years. It is a common ground that there should be a clean break arrangement in this case. In my view, there is no factor which warrants a departure from the equal sharing principle.

108.  I have ruled that the cash gift in the sum of HK$355,000 received by the wife after separation should not be counted as a matrimonial asset (See §[64] above). The total matrimonial pot thus becomes HK$49,881,614.40 ($50,236,614.40 - $355,000) (say HK$49,800,000). This sum should be shared by the parties equally, ie HK$24,900,000 each. The husband has HK$2,468,965.25 under his name. By simple calculation, he should receive about HK$22,431,034.75 from the wife.

109.  Nevertheless, it is the husband’s open proposal that due to their huge disparity in age, he is prepared to take only HK$16,970,000 from the wife. Since this is what the husband, who is legally represented during the whole proceedings, has benevolently offered to the wife, I see no reason why his view should not be respected. Accordingly, I shall order the wife to pay a lump sum of HK$16,970,000 to the husband as a clean break arrangement between them.

Conclusion

110.  Due to the matters set out aforesaid, the wife will have to make available HK$16,970,000 for the husband. She does not have sufficient HKD at hands and may require time to convert her RMB into HKD and/or to sell some of her shares.

111.  I therefore will make the following order:

(1) The respondent (wife) shall pay a lump sum of HK$16,970,000 to the petitioner (husband) for his maintenance in the following manner:

(a) a sum of HK$8 million within 30 days from the date of this judgement;

(b) a sum of HK$8.97 million within 60 days from the date of this judgment; 

(2) Subject to (1), each party shall keep the assets now under their respective names;

(3) Upon compliance of (1) above, the ancillary relief claims of both parties do stand dismissed;

(4) The respondent (wife) shall bear the petitioner’s (husband) costs of the ancillary relief proceedings (including all costs reserved) to be taxed if not agreed; certificate for counsel is granted.

112.  Lastly, I would like to express my gratitude for the helpful assistance rendered by both counsel to me in this trial.

[1] See bundle [B1/647-648].

[2] See bundle [B1/604].

[3] See bundle [B2/647, 649-650].

[4] See bundle [B2/642].

[5] See bundle [B1/616-8 to 616-9].

[6] See bundle [B1/616-9 to 616-11].

[7] See bundle [B1/616-12].

[8] See bundle [A3/469].

[9] See bundle [B1/616-4].

[10] See bundle [B1/616-35].

[11] See bundle [B2/659].

[12] See also §65 below.

[13] See bundle [A3/512-524].

[14] See bundle [A3/472].

[15] See bundle [A3/512].

[16] See bundle [A3/473].

[17] See bundle [A3/542].

[18] See bundle [A3/519-521].

[19] See bundle [B2/668-122].

[20] Day 5 of trial (AM session).

[21] See bundle [B2/616-625].

[22] See bundle [B1/616-21].