CHWS v. LNLAI

FCJA 3385/2013

[2018] HKFC 16

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

JOINT APPLICATION

NUMBER FCJA 3385 OF 2013

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Decision

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Introduction

1.  The 2^nd applicant (“the wife”) filed 2 summonses on 15 February 2016 for (i) an order made against the 1^st applicant (“the husband”) to answer her 4^th questionnaire and (ii) for an order “to view and agree on the wordings by the respondent before their filing into the Court to be sealed”. 

2.  At the hearing, I have duly explained to the wife the procedure of court order to be approved and sealed. The relevant part was contained in paragraphs 1 – 10 of the Practice Directions 16.1. When one party is represented, the legal representative of that party will submit a draft order to court for approval, the court will seal the order when the same be approved. The wife agreed to withdraw this summons with costs to the husband.  

3.  The only outstanding matter to be determined is whether leave be granted to wife to issue the 4^th questionnaire to the husband.

4.  Ms Kwan, counsel for the husband, has helpfully stated in her skeleton submissions the husband is willing to answer the 4^th questionnaire save for a number of questions. The opposition of such being those questions were too far fetch or the requests had already been answered.

Legal principles

5.  The same legal principles on discovery applies as stated in Order 24 of the Rules of District Court, Cap 336H.

“Order for discovery of particular documents, O. 24, r. 7(1)

Subject to rule 8, the Court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the application or any class of document so specified or described is, or has at any time been, in his possession, custody or power, and if not then in his possession, custody or power when he parted with it and what has become of it.

Discovery to be ordered only if necessary, O. 24, r. 8(1)

On the hearing of an application for an order under rule 3 or 7the Court, if satisfied that discovery is not necessary, or not necessary at that stage of the cause or matter, may dismiss or, as the case may be, adjourn the application and shall in any case refuse to make such an order if and so far as it is of opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs.”

6. The Matrimonial Causes Rules, Cap 179A also states:

“Investigation by court of application for ancillary relief, rule 77(4)

Any party to an application for ancillary relief may by letter require any other party to give further information concerning any matter contained in any affidavit filed by or on behalf of that other party or any other relevant matter, or to furnish a list of relevant documents or to allow inspection of any such document, and may, in default of compliance by such other party, apply to the court for directions.”

Question 1(ii)

7.  The question states “for companies that are deregistered, namely “C Limited” and “S(N) Limited”, please provide the last annual return and financial statements.

8.  The husband says the companies were dissolved in 2009 and 2008 respectively, it is not necessary to provide annual returns. For “C Limited”, the last annual report for the year ended 31 March 2005 has been provided in an answer already[1]. In the same answer, the husband has clarified “C Limited” was incorporated for the purpose of holding a property in Hong Kong. The said property was subsequently sold to another company where the husband was a common director. For ‘S(N) Limited”, it has been deregistered on 27 June 2008, for more than 9 years.

9.  I am satisfied the husband has provided sufficient answer to “C Limited”, not only the last annual return but the purpose of holding a property. Nevertheless, be it “S(N) Limited” has been dissolved more than 9 years ago, the husband should disclose the last annual return prior to its deregistration.

Question 1(iii)

10.  The wife requests for information of “GS(P) Ltd”, “SM Limited, “NTH Limited”, “SH Limited”. The request states “Please advise whether the First Applicant has/had received any dividends/distributions and/or remuneration/ allowance/ bonuses from all of these companies since its first appointment as a shareholder or director, if so, please advise the amount so received for the last 3 years or for any time when the First Applicant had/has any direct or indirect interest in the companies.”

11.  For “GS(P) Ltd”, the husband explains it has been dormant since 2004/2005 until its compulsory winding up in April 2016. No information is available. When the company was dormant, I agree there was nothing much to provide, for this reason, I find providing the last annual return of this company is sufficient.

12.  For “SM Limited”, the husband explains an answer has been provided in answers previously given[2]. In that the husband said he has no direct involvement in this company. He confirmed he has received no dividend / distribution from this company[3]. He has attempted to look for information from this company. The husband was being informed, in accordance with the policy in Macau, when the net profits of a company do not exceed a certain amount, no financial audits are required. In light of what he has answered, he has provided the notice of tax assessment of this company for the financial year 2005 – 2011[4]. For this, I am satisfied the husband has provided his best answer to the request.

13.  For “NTH Limited”, the husband has answered he has no beneficial interest in this company.[5] I do not intend to reproduce the entire answer but in gist, the husband said, in or about 2003, he held 200 shares of in trust for one Mr. S Tsoi, and on 18 January 2012, he had transferred the said shares to Mr. S Tsoi. For this, I am satisfied the husband has provided his answer to the request.

14.  For “SH Limited”, the husband has answered in his Form E filed on 13 March 2014 that he was the director of this company. Although the husband had explained in his further answer[6] he was not the beneficial owner of this company, I agree with the wife that, in his capacity as a director, he is capable to disclose what the wife has requested.

Question 18 - “Missing pages of China Construction Bank statements since its open date”

15.  The wife requests for missing pages of monthly statements of China Construction Bank of “SM Limited”, Ms Kwan conceded and confirmed the husband will provide those in due course.

Question 19 : Credit card statements from 2008 – 2015

16.  The wife insists on (i) a detailed account on the credit card spending and documentary proof of source of funds for repayments’ (ii) the wife asks the husband to state whether the funds were reimbursed by his employers with proof and (iii) categorization of personal and business expenses. The husband is willing to provide answers to those amount exceeds HK$50,000 for the period after October 2011, i.e. 3 years prior to the joint application.

17.  I am of the view that the husband’s proposal is reasonable. The wife is running a big money case and her expected share of matrimonial asset is more than HK$100 million. There is no good reason to dig into the minute expenses. The husband shall only answer those expenses exceed HK$50,000.

Question 25: Father’s loan of HK$1 million in April 2010

18.  There was a transfer of funds from the husband’s father to the husband in sum of HK$1 million to “AA company”. The wife requests for the nature of the husband’s involvement in this transaction.

19.  I am satisfied the same has already been answered[7], the husband is not required to provide further answer.

Question 26 – “Put option arrangement between husband’s father and third party”

20.  The wife requests for a copy of the put option deed dated 18 May 2010. The wife was alerted to this document in an answer previously provided by the husband[8]. The husband said he was not privy to the contract. The said answer referred to a letter written by Messrs Sit Fung Kwong Shum to one Mr Liu and the put option deed was first mentioned. I agree with the husband that the question is too far fetch, especially when the said letter was dated 29 July 2010, earlier than 3 years from the joint application.

Question 27 – “Source of funds re UK property GBP355,000”

21.  The wife asks for this because SH Limited settled the husband’s payment from the husband’s director’s loan account after he had resigned as a director. The husband said he has duly answered it[9]. I am satisfied the husband had already explained the transaction, further answer is unnecessary.

Question 29 – the management account and income assessment of “SM Limited”

22.  The wife requests for the same and they have been provided in the answer already[10].

Question 30 – Official receipts for cheque payments

23.  The wife requests for official receipts for cheque payments. I agree with the husband that he has already provided very detailed answers to the transactions. All copies of cheques have been already been provided except for Question 7(67) dated 4 October 2011 for which transaction advice has been provided[11]. Official receipts are unnecessary.

Question 31 – payments made and received in “SH Limited”

24.  The wife says, this company paid her family living expenses. She requested the husband to identify and categorize the payments related to family expenses. The husband agreed to provide those items of more than HK$50,000, with reference to the husband and after recorded after October 2010. I agree this is a reasonable period of disclosure. As I have indicated before, for big money cases, minute expenses are unnecessary.

Questions 34 and 35 – “missing cheque copy” & “director’s loan account updated”

25.  The husband says the answer has been provided[12]. It is not necessary for him to provide further answer.

Question 35 –

26.  The husband says the answer has been provided[13]. It is not necessary for him to provide further answer.

Conclusion

27.  I make the following order:

(i) Leave be granted the wife (“the 2^nd Applicant”) to file and serve the 4^th Questionnaire (as per the draft in Bundle P8 of this application within 14 days hereof.

(ii) Save an except the questions referred to in the Schedule hereinbelow, the husband (“the 1^st Applicant”) do file and serve an answer to reply to the 4^th questionnaire within 56 days hereof.

(iii) The wife’s (“the 2^nd Applicant’s”) summons with regard to “to view and agree on the wordings by the respondent before their filing into the Court to be sealed” filed on 15 February 2016 be withdrawn with costs to the husband (“the 1^st Applicant”), to be taxed if not agreed.

(iv) The costs of the wife’s summons with regard to issuance of the 4^th questionnaire be reserved.

Schedule[14]

1. Question 1(ii), limited to “C Limited”;

2. Question 1(iii) limited to “GS(P) Limited”, “SM Limited” and “NTH Limited”;

3. Question 19, limited to those expenses below HK$50,000;

4. Question 25;

5. Question 26;

6. Question 27;

7. Question 29;

8. Question 30;

9. Question 31, limited to those expenses below HK$50,000;

10. Question 34; and

11. Question 35.