WSM v. YKY

FCMC 8306/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO.8306 OF 2015

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J U D G M E N T
(Divorce)

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The Re-amended Petition

1.  This is a trial of the petitioner husband (“the husband”)’s re-amended petition for divorce based on 2-year separation as from December 1993.   The respondent wife (“the wife”) opposed the petition saying that they did not separate, not until the year of 2015.

Issues

2.  There is one major issue for the court’s adjudication, namely, whether the parties have lived apart for at least 2 years as from December 1993.

3.  Ancillary to this, the court also has to decide on the following sub-issues:

(1)   Whether a separation agreement (“SA”) was executed by the parties;

(2)   The purpose of signing the SA;

(3)   Whether there was actual “living apart” by the parties after the execution of the SA; and

(4)   Whether there was resumption of cohabitation after the parties’ separation, if any.

4.  For the purpose of this judgment, the terms of “living apart” and “separation” will be used interchangeably and they will carry the same meaning unless otherwise stated.

Introduction

5.  The husband is 77 years of age.  He was born in the Mainland and came to Hong Kong in 1957.  He first worked in an embroidery garment factory and later ran his own factory starting in about 1964.

6.  The wife is 79 years old.  She was born in Hong Kong and completed her secondary education locally. Thereafter, she worked in an Indian trading company as a merchandiser.  There is no dispute that the wife’s proficiency in the English language is much better than that of the husband.

7.  The parties were married in 1967.  Within wedlock, they have 3 daughters, all of whom are now independent adults either in their 30s or 40s. 

8.  In about November 1978, the husband started running a new business of electric fan production which proved to be a rather successful business venture.

9.  In about 1984, the whole family emigrated to Canada, firstly to the city of Calgary, and not long after, relocated to the city of Vancouver.  Nevertheless, the husband continued to fly back to Hong Kong looking after his electric fan business.

10.  In Vancouver, the family acquired a house at 6065 Trafalgar Street (“the Trafalgar Street Property”), which remains to be the wife’s residence, even up to now.  From then on, the parties continued to invest in a large number of landed properties in Vancouver, mainly financed by the substantial profits earned from the electric fan business.  All these proved to be very profitable investments and over the time, the parties have acquired a total of 29 properties, either in their joint names or through 2 companies in the names of Lai Sun (“Lai Sun”) and SKW (“SKW”).  It is not disputed that since the wife was stationed in Canada together with the 3 daughters, all those properties were mainly managed by her.

11.  There is no dispute that on or about 17 December 1993, the parties signed a letter of instructions (“Letter of Instructions”) (1/88-89) to a firm of lawyers in Vancouver called Messrs Loh & Co. to prepare a SA, in which a number of 9 properties would be transferred to the wife. 

12.  It is the case of the husband that pursuant to the Letter of Instructions, the parties did sign the SA evidencing the parties’ separation as from December 1993 and a division of the family assets between the parties. 

13.  The wife does not dispute that she did sign the Letter of Instructions but is not sure whether the SA was actually signed afterwards.  It is her case that there was no actual separation between the parties and the sole purpose of the SA was for the husband to denounce his Canadian residency and thus enabling him to avoid Canadian taxation.  She said despite the transfer of all the properties into her name, the parties remained living, though for most of the time in different countries, as a married couple.

14.  On 30 June 2015, the husband issued a petition for divorce (“the original petition”) based on 2-year separation saying that the parties were separated on or about June 2004.  It was also stated therein that the parties have cohabited at “Flat C, 13^th Floor, No.71 Broadway, Mei Foo Sun Chuen, Hong Kong”.

15.  On 24 August 2015, the wife filed her Answer disputing the fact about the parties’ separation in or about June 2004.  She said the parties had never separated and she asked for the dismissal of the petition.

16.  In about December 2015, the husband applied for amendment to the original petition by changing the time of separation to December 1993.  The application was granted and an amended petition for divorce with a new separation date of December 1993 was filed (“the Amended Petition”). 

17.  The wife filed her new Answer still averring that the parties had never separated, be it in June 2004 or December 1993.  She viewed the separation of the parties only started from about August 2015 when the husband issued and served the original petition for divorce on her.

18.  As the parties failed to come to any compromise on the Amended Petition, the case was adjourned to today for trial.

19.  At the first day of trial, the husband successfully applied for a further amendment to the Amended Petition in that the place of the parties’ cohabitation was amended to “Flat B, 11/F, No. 69 Broadway, Mei Foo Sun Chuen, Kowloon, Hong Kong”.   The re-amended petition was filed on 20 October 2016 (“the Re-amended Petition”).

The Legal Principles

20.  The sole ground for granting a decree of divorce is that the marriage has broken down irretrievably: s.11 of the Matrimonial Causes Ordinance, Cap.179 (“MCO”).

21.  The court shall not hold the marriage to have broken down irretrievably unless the petitioner satisfies the court of one or more of the 5 facts listed under s.11A (2) of MCO:

“(2) The court hearing a petition for divorce shall not hold the marriage to have broken down irretrievably unless the petitioner satisfies the court of one or more of the following facts-

(a) That the respondent has committed adultery and the petitioner finds it intolerable to live with the respondent;

(b) That the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent;

(c) That the parties to the marriage have lived apart for a continuous period of at least 1 year immediately preceding the presentation of the petition and the respondent consents to a decree’s being granted;

(d) That the parties to the marriage have lived apart for a continuous period of at least 2 years immediately preceding the presentation of the petition;

(e)   That the respondent has deserted the petitioner for a continuous period of 1 year immediately preceding the presentation of the petition.”

22.  The Re-amended Petition of the husband is based on s.11A(2)(d) of MCO in which he claimed the parties had lived apart for a continuous period of more than 2 years before the presentation of the petition, namely from December 1993.   The burden is on him to prove that fact.  I was also reminded by Mr Selwyn Yu SC for the wife, which I accept, that that was the only pleaded case of the husband and no alternative case has been put forward.  Therefore, the court needs not be concerned with whether the living apart of the parties come about at any later stage.

23.  There is no clear definition of “living apart”, except in s.11C (1) of MCO, it is stated that:

“(1) For the purpose of this Part, a husband and wife shall be treated as living apart unless they are living with each other in the same household.”

24.  A useful explanation of the concept can be found in Rayden and Jackson on Divorce and Family Matters (18^th Edition) 1(1) at Chapter 9.57:

“9.57 A husband and wife must be treated as living apart unless they are living with each other in the same household. ‘Living apart’ does not exist so long as both parties bona fide recognise the marriage relationship as continuing even though the husband and wife are separated. The relationship does not end by reason of a separation brought about by the pressure of external circumstances such as absence on professional or business pursuits, or in search of health, or, it may be, even of pleasure. Sexual intercourse, dwelling under the same roof, society and protection, recognition in public and private, correspondence during separation may be regarded separately as different elements the presence or absence of which go to show more or less conclusively that the marriage relationship does or does not exist, the weight of each of these elements varying with health, position in life, and all the circumstances of the parties…”

25.  A similar approach was adopted by the Hong Kong Court of Appeal in PTLO v KLK[1] in which Cheung JA, after considering a line of authorities, said at paragraph 60 of the Judgment:

“60 Drawing the threads together, in my view, it is plain common sense that when parties are not physically living together in the same place it does not mean, in the context of MCO, that they are living apart or have become separated because they may be forced to adopt a lifestyle by, for example, the nature of their work. There must be a recognition by them that the marriage has come to an end. On the other hand, where the couple is living physically in the same house, they can only be regarded as living apart or separated if they are living separately as two households, meaning they live entirely separate lives.”

26.  I shall bear the above principles in mind when I come to consider whether the parties have lived apart for a continuous period of at least 2 years as stipulated under s.11A (2)(d) of MCO.

The Husband’s Evidence

27.  The husband has filed a narrative affirmation on 10 March 2016 in support of his Re-amended Petition. In there (1/68), the husband described how his relationship with the wife started to deteriorate in about 1987 and the ending of their sexual relationship.  Despite the fact that the wife did stay with him and his parents at Flat B, 11/F, No.69 Broadway, Mei Foo Sun Chuen (“Flat 11B”) whenever she returned to Hong Kong, the wife had never shown any care towards his aged parents.  Neither did she bother or assist in the household chores, showing that she only treated Flat 11B as a hotel.

28.  According to the husband, the final straw came in about 1991 when his aged mother passed away and the wife refused to come back to Hong Kong for the funeral.  In §16 of his affirmation (1/70), the husband said:

“…. This eventually triggered the irretrievable breakdown of our marriage.”

29.  Despite the said breakdown of marriage, the husband said he still did not want to divorce the wife due to his traditional Chinese thinking and concern for his 3 daughters.

30.  In about 1993, the husband decided to return to Hong Kong for good and having regard to the breakdown of the marriage, he decided to have a separation arrangement with the wife.  He talked to the wife and proposed to leave her all the then properties in Canada as her future living expenses.  The wife raised no objection but requested to keep the separation a secret as she did not want their 3 daughters to be affected.

31.  It was the wife who arranged a firm of lawyers, Messrs Loh & Co. at which they attended together on 17 December 1993 for the preparation of a SA.  They signed the Letter of Instructions confirming various terms of the SA including:

(1)   The transfer of 9 properties in Canada to the wife;

(2)   No maintenance to be payable by the husband; and

(3)   There shall be mutual release of any future claims between the parties.

32.  The husband was given to understand that by executing the SA, all the then assets and properties in Canada (i.e. the 29 Canadian properties or the sale proceeds thereof) would be fully given to the wife.  However, the husband is not in a position to produce a copy of the SA as the same should have been left in Canada.  Be that as it may, the husband is able to produce a copy of a letter from another firm of lawyers, Messrs John Chao (1/91) issued to the wife on 22 December 1993 confirming that Messrs John Chao had discussed the terms of the SA with the wife and attended the execution of the same.

33.  The husband returned to Hong Kong after the execution of the SA and subsequently became a non-resident as he no longer maintained any significant residential ties with Canada.  The parties had also been maintaining separate finances and their respective households in Canada and Hong Kong separately and independently.

34.  The husband said he was a traditional Chinese man and hence did not take out any divorce proceedings against the wife.  However, as the 3 daughters have now all grown up and after the marriage of the youngest daughter in 2014, the husband felt that there was no need to keep the breakdown of the marriage a secret and so he decided to take out proceedings to formally end the marriage which had already been broken down decades ago.

35.  Finally, he asked the court to grant a decree of divorce based on the parties’ separation as from December 1993.

The Husband’s Witness

36.  The husband has called a witness Mr. Mason Loh to testify on his behalf. 

37.  Mr. Loh is the managing partner of the firm of Messrs Loh & Co. (“LC”) which received instructions from the parties to prepare the SA.  According to the witness, he did not have specific recollection of the parties, nor could he produce a copy of the SA, as the instructions were given some 23 years ago.  However, by looking at the available documents, including the Letter of Instructions, he believed that the said letter was signed by him on behalf of LC and was subsequently endorsed by the parties.  Recent land searches also confirmed that it was also LC which prepared the registration documents to effect the transfer of the 9 Canadian properties to the wife.  Despite the fact that a copy of the SA could not be produced, Mr Loh did provide a copy of the template which his firm usually used for preparing separation agreements for this court’s consideration.

The Wife’s Evidence

38.  It is the wife’s case that there has never been any separation as from December 1993.  She said that after the emigration to Canada, the parties have maintained a good relationship, including sexual relationship until about 2006 when she discovered the husband’s affairs with a Thai lady (“S”).   S used to work as a domestic helper for them and has given birth to a son for the husband in 2001.  The wife first proposed that the husband should leave this woman but was refused.  She had no choice but to tolerate this relationship as she did not want to lose the marriage. She told the husband that she would only tolerate the relationship on conditions that she would remain the husband’s wedded wife forever; they had to reside together whenever she was in Hong Kong; and she did not want to see S. She said the husband was very happy to hear that and promised that the she would be “Mrs. Wong” for ever.

39.  As to the signing of the SA, it is the wife’s case that in or about December 1993, the parties did come to an agreement that the husband would renounce his Canadian residency for tax avoidance purpose.  She said arrangements were made by the husband and they did attend lawyers for that purpose, with subsequent transfer of some landed properties into her name.  However, the wife could not confirm whether a formal separation agreement was actually signed as this happened some 23 years ago and she was not given a copy of the SA.

40.  The wife further testified that there was ample evidence to prove that the parties had lived together as husband and wife well after 1993.  She has produced numerous photographs showing that the parties attending many overseas trips together. She pointed to the fact that whenever she returned to Hong Kong, she would reside at Flats B and C, 13th Floor, No.71 Broadway, Mei Foo Sun Chuen (“13B & C Property”) which was the parties’ matrimonial home in Hong Kong.  They would share the same bedroom and even the same bed together.  This also happened in Canada.  Whenever the husband went to Canada, he would reside at the Trafalgar Street Property which had been the parties’ matrimonial home in Canada for the past 30 years.  Again, they would share the same bedroom and the same bed there.  She had continued to receive financial support or gifts from the husband.  They had even maintained a joint bank account in Hong Kong.  She was always being addressed as “Mrs. Wong” and attended various company functions.  She was only given the title of “Business Consultant” very recently and being paid a monthly salary of $10,000.  She said all these were irrefutable evidence that their husband and wife relationship did not end until the husband’s issuance of his petition for divorce in 2015.

Whether a SA was signed?

41.  I will deal with the sub-issues first.

42.  The first sub-issue is whether there was a SA being signed by the parties.

43.  The husband said they had signed such an agreement, to which the wife said she could not confirm.

44.  I note that it is the husband who is relying on this SA to prove his separation with the wife.  The burden is therefore on him to prove, on a balance of probabilities, that such a SA was indeed properly signed and being valid.

45.  Despite the fact that the husband is unable to produce a copy of the SA, by looking at the other supporting evidence, I am prepared to accept that a SA was actually prepared by Messrs Loh & Co. and was signed by the parties.  This must be the case because the Letters of Instructions (which was also signed by the wife) was given to the lawyer to prepare such a SA.  This was followed by another letter from another lawyer Messrs John Chao who had demanded payment for his services in:

“Taking of instructions; attending to perusal of Agreement, attending to review and discussion of same; attending to execution of same.” (1/91)

There is no reason to believe that after instructions being given to Messrs Loh & Co., the parties did not proceed to sign the said agreement. 

46.  The next question to be asked is: even if there was such a SA being signed by the parties, what were the terms of the SA?

47.  Although there is no evidence on the actual terms of the SA, Mr Loh has produced, in his 2^nd Affirmation dated 17 October 2016 (5/1540-1548), a template of the Separation Agreement that the firm usually used.  In recital C of that template, the following words are being used:

“C The parties have been living separate and apart since on or about ___________, although they have continued to live in the same residence.”

48.  In paragraph 1 of the main body of the agreement, the following words are also used:

“1. The parties shall live separate and apart and be free from control of each other.”

49.  With this piece of additional evidence, I am prepared to accept that the SA signed by the parties in December 1993 did contain a recital or term that were similar to the template produced by Mr Loh.

Purpose of signing the SA

50.  The next sub-issue is the purpose of signing the SA.

51.  The husband’s case is that it was signed for the purpose of effecting or evidencing the parties’ separation.

52.  On the other hand, the wife’s case is that it was signed solely for tax avoidance purpose.

My views

53.  Although Messrs. Loh & Co. was said to be arranged by the wife to prepare the SA, I think it is quite clear from the evidence that the firm was representing the husband in the preparation of the document. The Letter of Instructions addressed to the husband began with the sentence:

“We confirm that you have instructed us to prepare a separation agreement with the following basic terms…”

54.  The fact that the wife’s signature did appear at the end of the letter does not change the identity of the principal, which I accept must be the husband.

55.  A separation from one’s spouse is no small matter, especially when one is alleging that by the said separation, there would be a clean break of all their financial responsibilities towards each other.  I find it quite inconceivable that the spouse who initiated the separation would not have retained at least a copy of the SA, if not the original document.  It is even more inconceivable in the present context when there is ample evidence to show that the husband has always been a very successful businessman who has the habit of keeping meticulous record of various documents, be they legal or otherwise.  He has kept loads of cabinets in the study rooms of the Trafalgar Street Property or the 13B & C Property containing various documents in the past few decades.  He was a person who would take all the troubles to countersign on the wife’s bank book to confirm the calculation or receipt of interest.  He was such a meticulous person that I find in improbable for him not to keep the SA, if it was indeed such an important document evidencing separation with his wife for 26 years (by the year of 1993).  The fact that he has not kept such a copy, if true, must point to the conclusion that it was not an important document to him at all.

56.  It is also not disputed that apart from the 9 properties named in the SA, there were other jointly owned properties, namely those registered in the names of Lai Sun and SKW. However, there were no provisions in the SA to deal with those other properties, nor were there provisions to deal with the maintenance of the youngest daughter (who was still a minor at the time).  These all point to the conclusion that the SA had not been intended to effect a genuine clean break between the parties.   

57.  Furthermore, there is indisputable evidence that by late December 1993, the husband did apply to become a non-resident of Canada.  The husband does not dispute that that did result in the reduction of his tax liabilities.  In a letter dated 23 August 1994 issued by Revenue Canada (which I believe is the authority for taxation in Canada), it was stated at §2 that:

“Our review of the information you submitted indicates that you have not maintained significant ties with Canada. As a result, we consider you to be a non-resident as of December 1993.”

58.  We all know that the husband did not stay in Canada for long after landing, especially after the first couple of years.  Therefore, the only significant ties he had with Canada at that time had to be his ownership of the Canadian properties.  By transferring all those properties previously held in joint names to the wife’s sole name, the husband had severed these significant ties with Canada enabling him to obtain a non-resident status.   This supports the wife’s case that the SA was only signed for tax purposes.  This, together with the findings that I am going to make on whether there was actual separation of the parties (which will be discussed in the section herein under), I accept it was more probable than not that the signing of the SA was for the purpose of tax avoidance, instead of effecting or evidencing the separation of the parties.

Whether there was actual separation after the signing of the SA

59.  It is the wife’s case that there has never been any separation, not until 2015 when the husband took out the present proceedings for divorce.  She testified that they even had normal sexual intercourse until at least 2006.  This was of course denied by the husband.

60.  Apart from this, I note that the wife was able to produce some very important evidence to show how the parties conducted their marital life after the alleged separation in 1993.

The living arrangements

61.  It is common ground that even after the year of 1993, 2 adjacent flats (i.e. 13B & C Property) at Mei Foo Sun Chuen were purchased in which the wife would reside whenever she returned to Hong Kong.   The husband does not dispute that they would live in the said property, sharing the same room and even the same bed.  This arrangement lasted for over 20 years, until about 2015 when the husband moved out of the flat and then instituted proceedings for divorce.

62.  For the utility charges, management fees, government rent and rates, domestic helper salaries, and household outgoings of the 13B & C Property, they have all been and still are being paid by the husband, even up to today. 

63.  As to the Trafalgar Street Property in Vancouver which is the wife’s main residence in Canada, there is also no dispute that the husband was still using the said property as his correspondence address for his personal matters until at least 2010.

The maintenance of the wife’s bank accounts in Hong Kong

64.  There is no dispute that the wife had kept 2 bank accounts with the Hang Seng Bank (A/C Nos. 244-4-009308 and 244-6-902153, 5/1554-1572) from 1985 to 2004.  The husband does not dispute that during the wife’s absence from Hong Kong, he was in possession of her bankbooks and would check the account on her behalf.  One can see that on the front of the 2 bank books, the Chinese characters「王」 「葉」 were hand written there by the husband. 「王」 is of course the surname of the husband and「葉」 the surname of the wife.   The husband failed to give any reasonable explanation on why he would have written the parties’ names on the bank books if they did not have a joint interest in those accounts.

The parties’ joint account

65.  Not only that the husband had kept and maintained the wife’s 2 bank accounts in Hong Kong, he had actually opened a joint account with her with the Bank of China (A/C No. 01269310019180, 1/190).  The said account was opened on 21 July 2003 and closed on 2 August 2012, lasting a total of 9 years.  During that period, at least 2 substantial sums were transacted therein, namely a sum of $120,000 was deposited when the account was opened on 21 July 2003 and a sum of $255,500 was withdrawn on 14 March 2008.  

66.  I note that when the sum of $255,500 was withdrawn, it was then deposited into the wife’s another sole account with the Bank of China (A/C No. 0129291013158, 2/727-729) and remained relatively untouched thereafter. 

67.  The husband did try to explain that the wife had difficulty in opening an account with the Bank of China and in order to help her, he agreed to open this joint account with her.   When faced with this bare assertion of the husband, I find this not being a very convincing answer.

Financial support

68.  The wife testified that the husband had paid her regular monthly sums of $10,000 into her account as cash to spend.  This happened over a prolonged period well after 1993.  Those payments were later changed to be given through the payroll of the husband’s company.  The husband did not dispute those payments but claimed that those were remunerations paid to the wife as his company’s “Business Consultant”. However, he could not show the kind of consultancy service that had been performed by the wife.  

69.  The husband’s financial support to the wife did not stop there.  At trial, I was referred to evidence on the settlement of the wife’s credit card bills by the husband.  There was also evidence on the provision of a Wing On subsidiary card for the wife’s personal use.  Upon reading the wife’s credit card or Wing On card statements (2/388-416), one would find that the words 「王太」 were stated therein indicating that those expenses were for “Mrs. Wong”. 

70.  The husband also does not dispute that his company has paid other expenses of the wife.  His staff has actually prepared a table listing out those payments covering the years of 2009 and 2010 (2/441-442).  Those payments included the settlement of the wife’s various credit card payments, cash in Canadian dollars, cash in Hong Kong dollars, cash in Reminbi, air tickets between Vancouver and Hong Kong and also medical expenses.  Those payments amounted to $292,821.50 in 2009 and $543,357.35 in 2010.

71.  The husband also admitted in court that he had paid the wife’s medical and dental bills from about 2007 to 2015 (2/428-438), as well as her glasses (2/417-426), and also redeemed air tickets for the wife by using his Asia Miles.

72.  The husband also confirmed in court that there was no limit on the wife’s spending until about March 2016 when he instructed his staff to limit the wife’s spending to $20,000 per month on her BOC credit card and Wing On card.

Gifts

73.  There is no dispute that the husband has given various gifts to the wife.  From a receipt dated 29 April 1996 (1/350), the husband had purchased a pair of Rolex watches in the sum of $180,000, one for male and one for female.  The wife said those were watches for a couple (情侶錶).   From 2 other receipts both dated 5 May 1996 (1/349), the husband had purchased quite expensive jewellery for the wife in the total sum of $120,000.  On another 2 occasions (1/351), the husband had also purchased 2 watches for the wife, one for $34,800 on 29 July 2006, the other one for $15,000 on 29 October 2007.

74.  All the payments and gifts as mentioned above were fully canvassed at trial but no convincing answers were forthcoming from the husband to explain his continuous financial support to the wife even though there had already been, according to him, a clean break between the parties upon separation in 1993.   When being further pressed by counsel during cross examination, he only tried to justify the same by saying that the wife was, after all, the mother of his 3 daughters.

Tax and other documents

75.  At the hearing, I was referred to 2 company’s tax returns filed with the Inland Revenue Department for the financial years of 2014/15 (2/374) and 2015/16 (2/386).  It is interesting to note that for the 2014/15 return signed personally by the husband as the President of the company on 16 April 2015 (i.e. before the husband issued his petition for divorce) (2/374), the wife was described as “married” instead of as “unmarried/widowed/divorced/separated”.  The name of the husband was put there as the spouse of the wife.  However, for the return signed on 22 April 2016 (i.e. after the issuance of the divorce petition) (2/386), the marital status of the wife was changed to “unmarried/widowed/divorced/separated” and the name of her spouse being left blank.

76.  I was also referred to the fact that when the husband applied to the Immigration Department to hire 2 domestic helpers to work in the 13B & C Property, he signed the undertakings (2/625) and in the section of “Particulars of household members residing at the contractual address”, he put down the name of the wife as one of the household members. 

77.  In other words, in spite of the husband’s present contention that he was separated from the wife from about December 1993, the fact remains that he had always represented to third parties, including government authorities that they had maintained a husband-and-wife relationship or that both he and the wife were household members of the same premises.

Overseas trips

78.  At trial, a substantial part of the time has been used to go through quite a large number of photographs of the parties attending numerous overseas trips together after the year of 1993.  In a schedule prepared by the wife (1/194), there were a total of 43 trips from the year of 2001 to 2014.  Many receipts were produced (1/195-248).  But the most telling evidence must come from the photographs themselves (1/252-347).

79.  I note that the first set of photographs was taken in November 1993 (1/252), one month before the husband’s alleged separation of the parties.  I can see that the parties were then standing closely together, wearing smiles on their faces, just like an ordinary happy couple enjoying a leisure trip together.

80.  The next trip was in February 1994 (1/253), 2 months after the alleged separation.  Similar scenes appeared.  Both of them were seemed to be sitting on a turtle, again with smiling faces on a Bali beach.

81.  There were also photographs taken during Chinese Year in February 1994.  This was a family photo with other family members being present.  I can see that the parties were holding hands, or that the husband had placed his right hand on the wife’s left shoulder.

82.  I can go on to describe numerous other occasions when the parties were seemingly enjoying their trips or occasions.   I cannot discern a single clue from those photographs that we are talking about but a happy couple.

Attending company functions

83.  In the photos, I was referred to those showing the wife attending various company functions, e.g. Christmas parties or Chinese New Year gatherings.   The husband admitted that the wife always attended those functions as “Mrs. Wong” and everybody would regard her as the boss’ wife.   There were also photos showing the wife in a trip to Beijing in 2004 attending the company’s court case in the Mainland.

84.  From those evidence, I accept that the wife has, during the years from 1993 to 2016, attended various company functions as the husband’s spouse.

The husband’s explanations

85.  Based on the above evidence, I do not think the husband is in a position to deny that, at least from appearance, the parties had been living as a happy couple for the past 20 odd years before the year of 2015.   In support of his case that there was a separation as from 1993, the husband did try to explain that there was a request or being an understanding between the parties that they would keep the separation confidential for they did not want to affect the children or to lose face.  That was why they always pretended to be a happy couple in front of other people. 

86.  However, that explanation does not sit well with some of the incontrovertible evidence.  For example, the husband cannot give a convincing explanation on why they would still go for frequent holidays, staying in the same room and even on the same bed when sometimes there were just 2 of them, without someone they knew accompanying them in the tour.   Nor is the husband in a position to explain why a “separated” couple would still pose in a photo with a big red heart and the words “Would You Marry Me?” as background (1/335) during those trips.

87.  Equally, there is no logical explanation on why if the parties have really effected a formal separation and a clean break of all their financial responsibilities towards each other, the husband should have continued to look after the wife’s financial affairs, including maintaining the wife’s personal bank accounts in Hong Kong or even opened a joint account with her.  The fact that the husband has continued to maintain the wife by giving her cash, paying her credit cards and buying her expensive gifts also indicated that there was not a clean break of their financial affairs.

88.  I agree with Mr. Yu SC’s submission that the husband’s then behaviours were totally inconsistent with a husband who had separated with his wife.

89.  The husband’s own pleadings also betrayed him in that if the parties had really separated in 1993, why he would have pleaded the year of June 2004 as the date of separation when he first took out the petition on 30 June 2015.  That separation date was only amended to December 1993 in December 2015.   There is no reasonable explanation on why the date of June 2004 was used in the first place.

90.  Equally, the husband has difficulty in explaining why he should have pleaded that the parties had cohabited at the 13B & C Property when there is evidence showing that the said property was not purchased until 1995.  That pleading was only amended on the second day of trial, i.e. on 20 October 2016.  In other words, his case up to the beginning of the trial was still that there was cohabitation between the parties at least in 1995.

91.  I note that the husband is 77 years of age and his proficiency in English is very limited.  However, he is also a very successful and meticulous businessman.  I find it highly improbable that he would have made such important mistakes on the date of separation and the address of the parties’ cohabitation.

92.  I also find the husband’s explanation of keeping the parties’ separation confidential hard to believe in view of the overwhelming evidence that the parties had lived as husband and wife even after the signing of the SA in December 1993.

Estoppel by deed?

93.  In his final submissions, Mr Koo for the husband submitted that as the wife had executed the SA by way of a deed, she should now be estopped from saying that the facts therein are not truly stated.   Accordingly, the parties, including the wife, should be estopped from denying that the parties intended to have a separation with a final settlement of their respective rights in properties, in that:

(1)   All properties and assets (a total of 29 real properties) in Canada were given to the wife who would continue to live in Canada for good; and

(2)   All other properties and assets (in Hong Kong) would be kept by the husband who would return to Hong Kong for good.

My views

94.  Apart from whether the doctrine of estoppel by deed is applicable in the present case, which will be discussed here in below, I have difficulty in accepting that there were 29 properties actually given to the wife.  The evidence shows that the 9 properties mentioned in the Letter of Instructions and the 2 companies were indeed transferred to the wife but there is simply not enough evidence to show whether the wife has received a total of 29 properties from the husband.  I believe that out of those 29 properties mentioned, some might have been transferred, or sold earlier with proceeds to buy subsequent properties.  One simply do not know.  If the husband contends that he has transferred or given a total of 29 properties to the wife, the burden is on him to produce such evidence, which I believe should not be too difficult because there would be record of transfer being kept in the proper authorities in Canada.

95.  As to the issue of estoppel by deed, I was referred by Mr Yu SC to Chitty on Contracts (32^nd Edn, 2015) at paragraph 1-140:

“… The scope of the doctrine is extremely limited in modern law. First, it only applies between the parties to the deed and those claiming through them. Secondly, it only applies when an action is brought to enforce rights out of the deed and not collateral to it. Thirdly, it only applies if the statement is clear and unambiguous…”

96.  Such principles were applied by Au-yeung J in the case of Tang Teng Hong Tso v Cheung Tin Wah [2014] 2 HKLRD 1032 in which Her Ladyship held that the plaintiff in that case was not estopped by deed from denying receipt of consideration under an agreement and said at paragraph 38:

“Estoppel by deed may be applied in actions on the deed that contains the statement but not to collateral actions between the parties to the deed: Wilken and Ghaly, The Law of Waiver, Variation and Estoppel (3^rd ed., 2012) para. 12.37.

Estoppel by deed may only be used in actions on the deed that contains the statement relied on.  It does not apply to separate or collateral actions between the parties to the deed.  In such cases, the deed may be relied on as evidence of the facts asserted in it but there is nothing to stop the parties adducing contradictory evidence.”

97.  The present trial is on the husband’s Re-amended Petition for Divorce, but not an action for the enforcement of any rights or obligations under the SA.  I agree that the principle of estoppel by deed has no application in this case.

98.  As to the issue of whether the SA can be relied upon as evidence of separation, I have already ruled (in §58 above) that it is more probable than not that the signing of the SA was for the purpose of tax avoidance, instead of effecting or evidencing the separation of the parties.  I shall therefore say no more on this here.

Resumption of cohabitation?

99.  In the above discussion, I have already ruled that the parties did not separate in December 1993; and that the signing of the SA was purely for tax purposes, that should be enough to dispose of the present proceedings.  But if I was wrong and that the parties did separate in December 1993 by signing the SA in Canada, I am also of the view that, by the parties’ conduct after the said separation, they must have resumed cohabitation as husband and wife at some point of time after 1993, probably in 1995 when the 13B & C Property was purchased as the parties’ matrimonial home in Hong Kong.   Under such circumstance, I am still of the view that the husband has failed to prove that the parties have lived apart for a continuous period of 2 years immediately before his presentation of the petition on 30 June 2015.

Summary of Findings

100.  By way of summary, these are my findings on the sub-issues:

(1)   A SA was indeed signed by the parties in December 1993;

(2)   The purpose of the SA was for tax avoidance instead of for effecting or evidencing a separation of the parties;

(3)   There was no separation of the parties as recognised by the law in or after 1993; and

(4)   Even if there was such separation in December 1993, the parties must have resumed cohabitation thereafter, probably in the year of 1995.

101.  Based on the above findings, I have come to the conclusion that the husband has failed to prove to the satisfaction of this court that the parties have lived apart for a continuous period of 2 years immediately before the presentation of his original petition on 30 June 2015. 

102.  The husband fails to prove an irretrievable break down of the marriage.

103.  The husband’s Re-amended Petition is therefore dismissed.

Costs

104.  I will now deal with the issue of costs.     

(re discussion on costs)

105.  Costs to follow event. The wife shall have the costs of the suit, including all costs previously reserved, if any.  I do not think the husband is raising any objection to that.  However, there is still the issue of whether there should be a certificate for 2 counsel. 

106.  Mr. Koo for the husband submitted that Mr. Yim as the junior in the wife’s legal team should be competent enough to handle the case and there was no need to instruct senior counsel.

107.  I note that the marriage lasted for over 30 years and during trial, quite a large number of issues had to be considered.  Moreover, I agree with Mr. Yu’s submission that the result of the litigation will also have very significant consequences to the parties, in particular, in respect of the issue of ancillary relief. Counsel’s estimation of the husband’s wealth is well over $400,000,000, excluding the value of his companies.   I see no counter submissions on this point.   In view of the complexity and important consequences of the case, I am of the view that the instruction of senior counsel, assisted by a very competent junior is well justified.  After all, I see that the husband also saw fit to instruct 2 counsel to represent him in this trial. 

108.  Therefore, I now order that the wife shall have the costs of the suit, including all costs previously reserved, if any, with a certificate for 2 counsel, such costs to be taxed on a party and party basis, if not agreed.

109.  Lastly, I think counsel for their able assistance in this case.