FKYP v. KHYF

FCMC 17515/2013

[2022] HKFC 196

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 17515 OF 2013

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Decision

(Variation of Order)

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Introduction

1.  There are 2 summonses by the Petitioner husband (“the Husband”) and 1 summons by the Respondent wife (“the Wife”) before me.

2.  Deputy District Judge Rita So made an order on 19 January 2021 after the trial of ancillary relief that the former matrimonial home (“the Property”) jointly owned by the parties be sold within 4 months after the grant of Decree Absolute and that the Husband do pay the Wife HK$12,000 per month as the maintenance for their 2 daughters.

3.  The Husband’s 2 summonses filed on 14 May 2021 and 15 June 2021 are for variation of the Order for sale of the Property by incorporating a mechanism to facilitate the sale of the Property even when the Wife does not cooperate.

4.  The Wife’s summons filed on 7 June 2021, on the other hand, is to ask that the sale of the Property be suspended until the Daughters have finished their tertiary education.

Background

5.  The parties were married in June 2000 with 2 twin daughters (“the Daughters”) born in 2007.

6.  The Husband issued petition for divorce in 2012 based on unreasonable behaviour of the Wife under the case FCMC 7952/2012 (“the Previous Proceedings”) in June 2012.

7.  Subsequently, the Husband issued a new petition based on one-year separation with consent under the present proceedings.

8.  On 28 August 2013, joint custody of the Daughters was granted to the parties with care and control of the Daughters be granted to the Wife by Deputy District Judge Pang (as he then was) under the Previous proceedings.

9.  Detailed background of this case can be referred to in the Judgment of Deputy District Judge Rita So given on 19 January 2021 (“the Judgment”).

10.  The dispute over ancillary relief took 7 days and the trial ended on 20 June 2019. As described by Deputy District Judge Rita So, the main dispute in the trial for ancillary relief was how the matrimonial assets should be dealt with, which consisted mainly of the most valuable asset, ie. the Property.

11.  Market value of the Property was agreed by parties at trial to be HK$12,530,000 with outstanding mortgage as at 18 December 2018 in the sum of HK1,112,697 resulting in the net value of HK$11,417,303.

12.  After the trial of ancillary relief, Deputy Judge Rita So made the following order on 19 January 2021:

(1)  The Wife do continue paying the mortgage, management fees, government rates and rent, and utilities for the Former Matrimonial Home until it is sold.

(2)  The Former Matrimonial Home be sold within 4 months upon the grant of Decree Absolute at a price not lower than the price to be agreed by the parties.

(3)  The parties do agree on the solicitor’s firm to engage for the transaction and do agree the price which the Former Matrimonial Home it is to be sold no less than that price, within 1 month from the date hereof, failing which a single joint expert be engaged to estimate the market value of the Former Matrimonial Home, with the single joint expert’s fees shall be shared equally.

(4)  In the event that the sale cannot be completed within 4 months upon the grant of Decree Absolute, the Former Matrimonial Home shall be sold by public auction with a reserved price of no less than HK$12,530,000. The public auction shall be held within 2 months from the expiry of the said time limit. The public auction is to be conducted by the Husband.

(5)  Both parties shall execute all the necessary conveyance, contract or documents incidental to the sale of the Former Matrimonial Home.

(6)  Upon completion, the net sale proceeds (after deducting the outstanding mortgage loan and all necessary expenses of the sale such as legal costs and agency fees) be shared between the Husband and the Wife in the ratio of 40% and 60% respectively, with the amount to be paid to the Wife subject to Legal Aid First Charge.

(7)  The Husband do pay the Wife periodical payments for the benefit of the Children in the sum of HK$12,000 each month (ie. HK$6,000 for each child) commencing on 1 February 2021 and thereafter on the 1^st day of each month until the Children reach 18 years of age or until each of the Children finishes her full-time education, whichever is later.

(8)  Upon compliance to paragraphs (1) to (6) above, the parties’ respective claim for ancillary relief against each other be dismissed.

(9)  There be liberty to apply in respect of the implementation of this order.

13.  Decree Nisi was granted on 28 August 2015 and made absolute on 3 May 2021.

Law

14.  Variation of orders made under s.6A of the Matrimonial Proceedings and Property Ordinance (“the Ordinance”) for orders relating to sale of property can be made under s.11 of the Ordinance.

15.  According to s.11(7) of the Ordinance, in exercising the powers conferred by this section, the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates.

16.  Further, parties may make applications in respect of the implementation of the Order under the liberty to apply provision included in the Order made on 19 January 2021.

17.  I shall deal with the parties’ respective applications in turn.

The Wife’s Summons

18.  The Wife alleged that the market value of the Property had dropped by 17% to between HK$10,460,000 and HK$10,830,000.

19.  The Wife did not adduce expert evidence by way of valuation report in support of the alleged drop in value of the Property but merely relied on certain online valuation tools from banks.

20.  Without the expert evidence, I find it difficult to accept the Wife’s evidence on the market price of the Property. Nonetheless, I do not consider whether there had been a drop in the value of the market price of the Property matters in this present application.

21.  As said by Deputy District Judge Rita So in the Judgment (paragraphs 160 to 162), she had reminded herself all relevant circumstances of the case including s.7(1) and 7(2) of the Ordinance and also the Wife’s case when considering whether to order sale of the Property.

22.  It is common sense that value of properties fluctuates from time to time. When Deputy District Judge Rita So provided for appointment of single joint expert to estimate the market value of the property in paragraph 3 of the Order, it clearly shows that she was well aware that market value of the Property could vary at the time of sale.

23.  There is further no justification or evidence as to why the sale should be postponed until the Daughters have attained 18 or finished tertiary education due to decrease in the value of the Property.

24.  The Wife said the proposal could be beneficial to the Husband as she would keep paying the mortgage, rates and government rent and management fees.

25.  Once the Property is sold, there should not be the need to pay rates and government rent as well as management fees.

26.  The Daughter were born in 2000, there would still be a number of years that the Husband has to wait until he gets the fruit from the sale of the Property, Husband is not bound to consider the postponement more advantageous than an immediate sale.

27.  The Wife said the Husband had higher earning capacity and no urgent need to sell the Property at a loss.

28.  I do not agree.

29.  At trial, both parties’ financial circumstances had been fully considered. As explained by Deputy District Judge Rita So, the total matrimonial assets amounted to HK$12,313,309 and there was no surplus assets that would remain after parties’ needs had been catered for (paragraph 156). The Wife knew full well that without selling the Property, there was no way that she could maintain her finance at the moment, with the Wife still had liabilities to be paid off (paragraph 166). It was considered simply impracticable to allow keep status quo (para 167). As a result, she was of the view that it was not practical and not fair to both parties to not sell the Property and it was simply not sustainable or practicable to keep the Property any longer (para 169).

30.  The Wife asserted that the Daughters wished to stay at the Property where they grew up and had a substantial connection.

31.  This cannot be considered something new or unexpected.

32.  Deputy District Judge Rita So was well aware of the Wife’s contention that she and the Daughters needed a place to reside (paragraph 162) and had considered all the circumstances including the emotional reasons and the hope of the Wife that the Daughters and she could continue living at the Property and was well aware it was the Wife’s case that it was the Daughters’ home since their birth (paragraph 169), it was still considered not sustainable or practical to keep the Property any longer. Deputy District Judge Rita So said she had not ignored the accommodation needs of the Wife and the Daughters but residing at a self-owned flat might be desirable and beneficial to the Daughters but it was not a must, they could find alternative accommodation by renting another unit (paragraph 170).

33.  The Wife said she would have to rent a place if the Property is sold. This had been argued (paragraph 162) and considered in the Judgment already.

34.  The Wife also complained that the Petitioner had failed to pay the maintenance pending suit, mortgage and further the maintenance ordered on 19 January 2021 for the Daughters.

35.  The Wife had made similar complaints at trial for the Husband’s failure to pay maintenance pending suit and mortgage (paragraph 185). Deputy District Judge Rita So already considered these matters before reaching her decision in her Judgment.

36.  For non-compliance of the orders for payments, the Wife can resort to enforcement proceedings. In my view these are not reasons for postponing the sale of Property in this case.

37.  The Wife finally asked for payment of lump sum of HK$1,440,000 equal to 10 years of maintenance for the Daughters. This is however not a relief sought in the Wife’s Summons.

38.  Deputy District Judge Rita So had considered all the circumstances including the Wife’s complaint about the Husband’s non-payment of maintenance pending suit and mortgage but still did not consider the need to order a lump sum payment in respect of the Daughter’s maintenance out of the sale proceeds of the Property. I do not find any justification to disturb her decision. Again, any concern over non-compliance of order for payment can be dealt with by enforcement proceedings.

39.  The Husband submitted that the Wife was just trying to do a back door appeal. I share the Husband’s view.

40.  In my view, the matters relied on by the Wife cannot be considered new or unexpected and I do not consider there is change of circumstances after the trial.

41.  I decline the Wife’s application and hereby dismiss the Wife’s Summons.

The Husbands’ Summonses

42.  The Husband said the Wife was not cooperative in executing the Order for sale of the Property.

43.  When the Husband tried to discuss with the Wife on the agreed value of the Property and appointment of single joint expert as well as lawyer to execute the sale of the Property over message exchange on 17 February 2021, the Wife refused and said she would apply for time extension of sale of the Property.

44.  Therefore, the Husband submitted that the Wife was not cooperative and she just tried to delay sale of the Property.

45.  The Husband’s both summonses seek to incorporate a mechanism for the sale of the Property in case the Wife does not cooperate.

46.  The Husband first made reference to the orders in cases FCMC 2978/2005 and HCMP 64/2010 for the orders therein and then referred to the orders in the case FCMC 13526/2015 for a more convenient mechanism.

47.  The Wife denied that she was not cooperative. The Wife does not specifically dispute a mechanism be incorporated or to the proposed mechanism. The Wife’s evidence and argument essentially repeated the grounds she relied on for the suspension of the sale of the Property. I have already dealt with the Wife’s case and arguments and do not repeat them here.

48.  The message exchange relied on by the Husband was made on 17 February 2021. The Decree Absolute was granted on 3 May 2021. The Husband filed his first summons on 14 May 2021.

49.  The Wife was supposed to agree on the agreed value of the Property and appointment of solicitors and joint expert within 1 month from 19 January 2021, yet the Wife refused to engage in a discussion on an agreed value of the Property and appointment of solicitors and a single joint expert. Yet she did not make an application for the alleged time extension promptly until the Husband had made his move. The Wife only made the present application on 7 June 2021 after the Husband had filed his first summons. If the Wife genuinely just wanted to apply for an extension of time but not to delay the sale of the Property, she should have made the present application earlier.

50.  I am satisfied that the Wife was not cooperative in executing the Order for sale of the Property.

51.  In any event, there has been a long history between parties in all sort of disputes in the divorce proceedings, I am of the view that incorporating a mechanism under the provision of liberty to apply could facilitate the execution of the Order for sale and to avoid further unnecessary litigation.

Orders

52.  In light of the foregoing, I make the following orders:

(1)  The Wife’s Summons filed on 7 June 2021 be dismissed.

(2)  Paragraphs 2 to 6 of the Order made by Deputy District Judge Rita So on 19 January 2021 be varied to the extent as follows:

1.  The Former Matrimonial Home be sold within 4 months from the date hereof at a price not lower than the price to be agreed by the parties, or in the absence of such agreement, the market value by private sale of the Former Matrimonial Home estimated by a single joint expert and the Wife do deliver vacant possession, title deeds and documents (if any) and all keys of the Former Matrimonial Home within 4 months from the date hereof;

2.  The parties do agree on the solicitor’s firm to be engaged for the sale of the Property and do agree on the price which the Former Matrimonial Home is to be sold no less than that price, within 1 month from the date hereof, failing which a single joint expert be engaged to estimate the market value by private sale and public auction respectively of the Former Matrimonial Home. If no agreement can be reached, the solicitor’s firm and single joint expert shall be appointed by the Husband;

3.  In the event that the sale cannot be completed within 4 months from the date hereof, the Former Matrimonial Home shall be sold by public auction with a reserved price of no less than the market value of the Former Matrimonial Home by public auction estimated by the single joint expert. The public auction shall be held within 2 months from the expiry of the said time limit. The public auction is to be conducted by the Husband;

4.  Both parties shall execute all the necessary conveyance, contract or documents incidental to the sale of the Former Matrimonial Home. The Wife shall sign all necessary conveyancing, contract or documents incidental to the sale of the Former Matrimonial Home within 7 days upon notice of the Husband, failing which the Husband shall be authorized to sign on the Wife’s behalf pursuant to section 38A of the District Court Ordinance (Cap 336), Laws of Hong Kong;

5.  Upon completion, the net sale proceeds (after deducting the outstanding mortgage loan and all necessary expenses of the sale including single joint expert’s fees, legal costs, agency fees and auction expenses) be shared between the Husband and the Wife in the ratio of 40% and 60% respectively, except the single joint expert’s fees which should be equally shared by the parties, with the amount to be paid to the Wife subject to Legal Aid First Charge.

53.  Both parties are acting in person. I am of the view that the fair order should be no order as to costs of the Husband’s Summonses filed on 4 May 2021 and 15 June 2021 and Wife’s Summons filed on 7 June 2021. This costs order nisi shall be made absolute within 14 days from the date hereof.