CWML v. WYK H LTD

FCMC 14552 / 2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14552 OF 2013

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JUDGMENT
(Preliminary issues)

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Introduction

1.   This is a preliminary issues hearing to determine the beneficial ownership of two properties – 16C RG and a related car park space known as L1 13 space (collectively known as the 16C property and car park space L1 13) and 37E, IR (the IR property). It is the 1^st Intervener’s case that he is ultimately the beneficial owner of both of these properties. The 1^st Intervener is the elder brother of the Respondent husband. The Petitioner wife challenges this and claims that 16C belongs to her solely and that the IR property also forms part of the matrimonial pot.  

2.   As is often the case with litigation of this type, this trial involves the unravelling of a number of financial transactions between family members, going back over many years, when the relationship between them was originally very good. The court is now required to try to unpick those financial transactions with a view to establishing who the true beneficial owner of each property is.

3.   With this in mind I have set out below in some detail both the background to the marriage and the litigation to date, together with a summary of each party’s case. Although somewhat long winded I am hopeful that this will assist when discussing the matters now in issue.

The background to the marriage and the litigation

4.   The parties married on the XX June 1992 after dating for about three years and had two boys who are now aged 22 and 19 years old respectively. The parties were both 35 years old at the time of the marriage.

5.   It seems that both parties were well educated; the husband had an interest in both law and Chinese medicine and studied both areas on a part time and full time basis intermittently whereas the wife was working in the human resources area when they first met. She subsequently studies law on a part time basis following the birth of their youngest son. The husband also worked in company administration prior to setting up a leather import business and before ultimately becoming a Chinese Medical practitioner.     

6.   In so far as the assets of the parties are concerned, in 1986, four years prior to the marriage, the husband purchased a property with the financial assistance of his father (the J property). In 1991 he subsequently purchased two car park spaces with the financial assistance of his sister. In addition also prior to marriage the husband held a share in a limited company known as SG Limited. This company was the vehicle for his brother-in-law’s medical practice. This company held a shop in which the brother-in-law’s clinic was situated. It is the husband’s case that he held this share on trust for his brother-in-law. It is also the husband’s case that both his sister (who is married to the brother-in-law) and his elder brother, the 1^st Intervener, offered him significant financial assistance from time to time both prior to and during the course of the marriage.

7.   Upon marriage the wife moved into the J property. Shortly thereafter in January 1994 the parties purchased the 16C property with car park space L3 73. As will be seen below each party has a different view of the legal basis for that purchase. What is not in dispute however is that the property was held in the sole name of the wife, it was purchased initially with the assistance of a mortgage from HSBC and it was tenanted. The wife was earning HK$30,000 per month at the time and she was originally responsible for the mortgage repayment. Further it is not disputed that the husband borrowed the down payment of HK$2 million plus an additional HK$100,000 for the stamp duty from his sister in order to make this purchase.

8.   In mid December 1994, following the birth of the eldest son and once the tenancy had come to an end, the parties moved into the 16C property. The wife was at that stage still working.

9.   A year later, in November and December 1995 the husband sold the J property and both related car park spaces. Six months later on the XX June 1996 the parties set up H Ltd, the 2^nd Intervener. Both the husband and wife were directors of H Ltd and the wife was also the company secretary. They then purchased a second property on a higher floor of the same block as 16C namely 22D with the car park space L1 13 for HK$7,330,000. The flat was purchased in the name of H Ltd. As before the 22D property was initially subject to a tenancy and the rental from that tenancy was used to pay for the mortgage.

10.   In 1997, following the emigration of the husband’s brother- in-law and sister to Canada, SG Limited was sold to the 1^st Intervener for HK$6 million. This included the one share that the husband had been holding on trust for the brother-in-law. In effect the 1^st Intervener purchased the shop premises where the clinic had been operating from. Half of the shares were then transferred to the husband. As will be seen it is the 1^st Intervener’s case that the husband did not purchase these shares and that in effect the husband held these shares on trust for him. This is disputed by the wife.

11.   In 1997 following the birth of the second son the wife started to work part time and her salary was accordingly reduced. Although the reasons for this are not agreed 16C was eventually put on the market for sale. This was during the run up to the 1997 property boom and the parties were initially able to sell the property for a very good price - HK$11 million. Unfortunately the property market then crashed and the purchaser walked away from the deal and forfeited his deposit. The wife retained that deposit of HK$1.1 million.      

12.   In the autumn of 1997 the husband set up a new company with friends in the leather import business – MV Limited. In addition two other companies were established namely KC and US International Limited. The husband was then earning in the region of HK$30,000 per month. He also did the accounts for SG Limited and earned a further HK$3,000 per month from this source.

13.   Unfortunately the property market continued to drop and the parties were unable to find a buyer for 16C. In mid November 1997 they moved into 22D and 16C remained vacant. In 1999 the wife was made redundant and she subsequently began studying for a LLB course externally with London University. The wife did not work in a paid capacity from August 1999 to September 2005. The husband continued to operate the leather business and to study part time.

14.   As will be seen below it is the 1^st Interveners and Respondent’s case that in March 1999 they and the Petitioner entered into an oral agreement to sell 16C to the 1^st Intervener for HK$6.5 million and that monies totalling that amount were then paid to the husband and wife through a variety of different channels. This is seriously disputed by the wife. However what is not in dispute is that in April 1999 the 1^st Intervener moved into the 16C property with his mother.

15.   In addition it is the 1^st Intervener’s case that quite separately from the purchase of 16C he lent the parties a further sum of HK$2.5 million during the period from 2004 – 2009 in order to alleviate their financial burden.

16.   In July 2004 the husband went to Nanjing for about 8 months in order to complete an internship program as part of his Chinese medicine studies. In December 2005 he subsequently graduated with a Bachelor of Chinese Medicine. He then went onto study for his Masters and in September 2006 he qualified as a Chinese Medical Practitioner. The wife meanwhile returned to work in September 2005. From that time onwards she became responsible for some of the family expenses.

17.   In or about August 2007 SG Limited sold the clinic for just over HK$15 million.

18.   In September 2007, 9,998 shares in the 2^nd Intervener were allocated to the 1^st Intervener so that he effectively became the sole owner of the 2^nd Intervener. The 1^st Intervener also became a director of the 2^nd Intervener. In October 2007 the 2^nd Intervener was used as a vehicle to purchase a property namely the VM Property. The following month in November 2007 the 2^nd Intervener purchased a second property the CBM property. In October 2007 a board resolution was passed and the 1^st Intervener became the sole signatory of a bank account in the name of the 2^nd Intervener opened with the Shanghai Commercial Bank. In December 2007 a second board resolution was passed authorizing the 1^st Intervener to open an online account with the same bank.

19.   In March 2008 the husband started to operate a Chinese medicine clinic out of the CBM property. He set up a further limited company for this purpose. The wife was the sole director and shareholder of that company known as ZZT. In addition the husband ceased his involvement with the leather import business and he transferred his shares in MV Ltd to one of his partners for no consideration.

20.   In June 2009 the parties sold 22D and car park space L3 73 for HK$8 million. For a period of time thereafter the family was split with the children residing in 16C with the 1^st Intervener and the parties residing at the CBM property where the Chinese Medicine clinic was situated. This arrangement lasted for about 6 months. It is the husband and 1^st Intervener’s case that shortly thereafter the title deeds to 16C were delivered to the 1^st Intervener. However the property was not formally transferred into the name of the 1^st Intervener.

21.   In April 2010 the IR property was purchased under the name of the 2^nd Intervener and shortly thereafter the parties and the two children moved into this property. In June 2012 the parties separated and the husband moved out.

22.   It is the 1^st Intervener’s case that he requested the wife to transfer 16C to him on a number of occasions but that she refused to do so. In particular there was a meeting between the 1^st Intervener and the wife in a Chinese restaurant on the 25 December 2012 where the situation was discussed.

23.   On the 12 March 2013 the wife sent a letter from her solicitors to the 1^st Intervener in which inter alia she resigned as both secretary and director of the 2^nd Intervener and gave up her 1 share in the company.

24.   On the 29 April 2013 the 1^st Intervener issued proceedings in the High Court against the wife with respect to the 16C property. On the 19 July 2013 2^nd Intervener issued proceedings against the wife in the District Court for the recovery of the IR property. The wife and children continue to reside in the IR property.      

The issues to be determined

25.   It is then against this broad back ground that I am asked to determine the following issues:

What was the legal and beneficial ownership of the 16C property when it was purchased in January 1994?

Was there an oral agreement for the sale and purchase of the 16C property and car park space L1 13 in March 1999? Consequently does the 1^st Intervener hold both of these properties beneficially?

Did the husband borrow the sum of HK$2.5 million from the 1^st Intervener?

Further does the 2^nd Intervener own the IR property or is it a matrimonial property to be included in the matrimonial pot for distribution between the parties?    

The law      

26.   Counsel for the husband and the 1^st and 2^nd Interveners has set out the relevant law in some considerable detail in his opening. Having reviewed the same it seems to me that the starting point must be the very helpful analysis provided by the Supreme Court in the United Kingdom in Jones v Kernott [2011] UKSC 53 as summarized by Mr Justice Mostyn in Bhura v Bhura & Others [2014] EWHC 727. This states as follows:

27.   “8.   The applicable legal principles concerning a property dispute such as this are tolerably clear and have most recently been re-stated by the Supreme Court in Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776.  In summary I think they are as follows:-

i) If there is an express declaration of beneficial interests then that is, almost invariably, the end of the matter.  Such an express declaration can only be displaced if it has been procured by fraudulent conduct.  In this case it is said by the wife that the signed TR1 for Mayfield Avenue is a sham.  A sham is of course a species of fraud.  It involves the parties entering into a dishonest compact, i.e. a conspiracy, to express the true state of affairs falsely in the written agreement.  I will analyse the law relating to sham transactions a little later.

ii) If there is no express agreement about the beneficial interests then there is likely to be (at least) a tacit understanding.  This is hardly surprising as one would expect that when people enter into what may very well be the most important economic transaction in their lives - buying a home - they would have a pretty clear understanding of who owned what share of it.  In determining whether there was such a tacit understanding, and if so what it was, the court will look at all the evidence holistically and will examine the whole course of the parties’ conduct in relation to the property.

iii) In the rare case where the evidence does not reveal a tacit understanding about ownership the court can reach for the presumptions.  An obvious presumption is that beneficial ownership is the same as legal title (see Jones v Kernott at paras 17 and 51(1)).

iv) Another is the presumption of the resulting trust.  In Pettitt v Pettitt [1970] AC 777 at 824 Lord Diplock doubted that it was of much relevance in the modern era.  In his view it would be “an abuse of the legal technique for ascertaining or imputing intention to apply to transactions between the post-war generation of married couples ‘presumptions’ which are based upon inferences of fact which an earlier generation of judges drew as to the most likely intentions of earlier generations of spouses belonging to the propertied classes of a different social era.”  Some commentators believe that the doctrine has a medieval origin.  The principal problem with it is that that is allows the “solid tug of money” (as Woodhouse J evocatively put it (echoing George Eliot) in Hofman v Hofman [1965] NZLR 795 at 800) “to submerge any faint suggestion that other [non-financial] contributions play a valuable part in the acquisition of family assets”.

v) A further presumption is the presumption of advancement but this can be regarded as being on its death-bed given that it is abolished by s199 Equality Act 2010, which is awaiting implementation.

vi) But presumptions are only presumptions.  In a memorable dictum Lamm J in Mackowick v Kansas City St. J. & C.B. Ry., 196 Mo. 550, 571, 94 S.W. 256, 262 (1906) stated that “presumptions may be looked on as the bats of the law, flitting in the twilight, but disappearing in the sunshine of actual facts”.

vii) “Actual facts” are those which suggest that a result steered by a presumption is unfair.  Although there are different degrees of emphasis and nuance all of the Justices in Jones v Kernott accepted that where a tacit agreement could not be found by a process of inference the court could impute to the parties a fair agreement which they never in fact made but which they should “be taken” as having made (see paras 45, 60, 72, 85(2)).  Of course, as Woodhouse J pointed out, this involves a “fictional attribution of intention”, but the process has a long pedigree.  One only needs to remind oneself of Lord Denning MR’s statement in Appleton v Appleton [1965] 1 WLR 25 at 28 to see how the wheel has turned full circle.  There he said “A judge can only do what is fair and reasonable in the circumstances.  Sometimes this test has been put in the cases: What term is to be implied?  What would the parties have stipulated had they thought about it?  That is one way of putting it.  But, as they never did think about it at all, I prefer to take the simple test:  What is reasonable and fair in the circumstances as they have developed, seeing that they are circumstances which no one contemplated before?” I cannot see any difference between that statement and that of Lord Wilson in para 87 where he rhetorically asked “where equity is driven to impute the common intention, how can it do so other than by search for the result which the court itself considers fair?””

With respect I agree.

27.   Unfortunately there is also a great deal of circumstantial evidence in this case and the credibility of the parties is very much in issue. With that in mind both sides have also referred me to Lee Fu Wing v Yan Po Ting Paul [2009] 5 HKLRD 513 where Deputy High Court Judge Thomas Au (as he then was) said that when assessing the credibility of each party’s case the court should consider:

6. (1) Whether the party’s case is inherently plausible or implausible;

(2) Whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;

(3) Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests.  This is relevant to the assessment of his overall credibility; and

(4) The demeanour of the witness.

28.   I accept that in considering the credibility of each side I will need to assess whether each party’s account is corroborated by the evidence and in particular by any contemporaneous documents that are available. I will also need to consider the inherent probability or improbability of what each party is saying. As pointed out by Mr Sham, counsel for the wife in his closing:

13. The civil standard of proof always means more likely than not. [i.e. the balance of probabilities].  The only higher degree of probability required by the law is the criminal standard.  But, as Lord Nicholls of Birkenhead explained in Re H (Minors) (Sexual abuse: Standard of Proof) [1996] AC 563, 586, some things are inherently more likely than others.  It would need more cogent evidence to satisfy one that the creature seen walking in Regent’s Park was more likely than not to have been a lioness than to be satisfied to the same standard of probability that it was an Alsatian: Secretary of State for the Home Department v Rehman [2003] 1 AC 153 at 194, para. 55.

29.   In addition both sides made reference to the Property and Conveyancing Ordinance, Cap 219, which confirms inter alia that any contract for the sale of land must be in writing (see sections 3, 5 and 6 in particular). My remit though, in this judgment, is limited to establishing the beneficial ownership of both of the properties in question as a necessary precursor to determining the division of assets post divorce.  

Each party’s case

The 1^st and 2^nd Intervener

The 16C Property and car park space L1 13

30.   It is the 1^st Intervener’s case that he had a meeting with the husband and wife in or about March 1999 at their home at 22D and that he offered to buy 16C from them for HK$6.5 million. He knew that they were struggling financially at the time and he wished to assist. He did not know however that the property was held in the wife’s sole name. He says that they reached an agreement inter alia as follows:

28. These were the following terms and conditions of the Oral Agreement:

(a) The 1^st Intervener would first pay HK$3,000,000.00 to the Petitioner and the Respondent within 30 days;

(b) The balance of the purchase price (i.e. HK$3,500,000.00) would be settled in the following manner:

i. The 1^st Intervener would take up half of the then outstanding mortgage loan in respect of the 16C Property and L3-73 Space, which was estimated to be HK$4,600,000.00, by contributing to half of the monthly re-payments until the mortgage loan was fully paid (totalling $2,3000,000.00 - being half of the said then outstanding mortgage loan);

ii. The remaining HK$1,2000,000.00 (i.e. HK$3,500,000.00 - HK$2,300,000.00) would be paid by the 1^st Intervener to the Petitioner and the Respondent upon completion of sale of the property situated at Flat E, 5^th Floor, TG, No. 18 T Road, Hong Kong (the “TG Property), which was then being occupied by the 1^st Intervener and his mother as their residence;

iii. As the 16C Property had been vacant since November 1997, the 1^st Intervener and his mother could move into the property at any time they wished to;

iv. At the request of the Petitioner and the Respondent, no conveyance document would be executed by them and the 2^nd Intervener in the meantime for the transfer of registered title of the Properties to the 1^st Intervener so that the Petitioner and the Respondent could have more cash flow for their own use.

29. In the premises, there was to be inferred a common intention of the 1^st Intervener, the Petitioner and the Respondent that the Petitioner, the Respondent and the 2^nd Intervener should hold the Properties upon trust of land for the 1^st Intervener.

(See the Points of Claim dated the 2 February 2015)

31.   Thereafter it is the 1^st intervener’s case that he complied with his side of the bargain and paid the money as agreed. In the Particulars he summarizes the position thus:

31. In summary, the 1^st Intervener had paid a total sum of HK$6,500,000.00 to the Petitioner and the Respondent for the settlement of the purchase price of the 16C Property and the L1-13 Space.

PARTICULARS

(a) a sum of HK$3,000,000.00 on 26^th March 1999;

(b) a sum of HK$1,000,000.00 on 3^rd January 2000;

(c) a sum of HK$200,000.00 on 9^th February 2000;

(d) a sum of HK$1,012,782.00 on 6^th March 2001; and

(e) sums in total of HK$1,287,218.00 for the settlement of the 1^st Intervener’s obligation towards the 16C Property’s mortgage payment from March 1999 until August 2009 when all the outstanding mortgage payments to the bank were discharged;

SG Limited

32.   As will be seen the wife has raised a number of allegations about SG Limited. In particular she alleges that the husband must have received half of the net proceeds of sale from the clinic in August 2007 as he was the legal owner of 50% of the shares at the time. In the 1^st Intervener’s Supplemental Witness Statement dated the 20 August 2015 he sets out in some detail his position with respect to SG Limited. In essence he denies this and maintains that 50% of the shares were held by the husband because the hope had been that the husband would have been in a position to invest in the company. When that did not materialize the husband simply continued to hold the shares on trust for the 1^st Intervener.

H Ltd    

33.   In so far as H Ltd is concerned it is the 1^st Intervener’s case that the 9,998 shares were allocated to him in September 2007 because:

17. At that time I had some cash in hand and had originally planned to use it to purchase a property for investment purpose.  Also, I planned to incorporate a limited company to hold the property, in order to get a better tax arrangement.  WYK [the husband] suggested to me that I purchase the property through H [the 2^nd Intervener] because H was a company with simple structure.  Apart from owning a Property with a car parking space, i.e. Flat 22D and the L1-13 Car Parking Space, H did not have other business.  Also, H has accumulated deficit, which is beneficial for tax arrangements.  At that time, I did not plan to raise a mortgage loan with the bank.  Furthermore, I purchased the property just for helping WYK.  As they were all my family members, I agreed with WYK’s suggestion i.e. to purchase the property in H’s name.

34.   Notwithstanding this it was always understood that 22D belonged to the husband and wife and despite the allotment of shares to the 1^st Intervener, he did not benefit from this arrangement other than as set out below. In particular although he was the legal owner of H Ltd when 22D was sold and even though he was therefore the legal owner of 22D he nevertheless received no financial benefit from the sale as it was understood that this property belonged to the husband and wife.

35.   Subsequently the 1^st Intervener purchased three properties through H Ltd – the VM property, the CBM property and the IR property. It is the 1^st Intervener’s case that he alone paid for the purchase price of all three properties including the deposit, balance of payment of the purchase price, stamp duty, legal fees, estate agent commission etc.

36.   It is also the 1^st Intervener’s case that he purchased the VM property and the CBM property so that the husband could set up and operate his Chinese medicine clinic without initially having to worry about paying any rent. He also allowed the parties to live there after they sold 22D. This is because their financial circumstances were very poor at the time. Initially the sons also stayed with him at 16C for about 6 months before joining their parents at the CBM property. However the arrangement was not ideal. There were only three rooms and the primary purpose of the property was to be a clinic. Thus after some discussion with other family members the 1^st intervener later purchased the IR property with a view to allowing the parties to live there in a more comfortable environment. It is his case that it was never his intention to gift the property to the parties, but rather he wished them to be able to live there rent free for a period of time until their financial circumstances improved.

The Husband’s case

The original purchase of the 16C Property and car park space L3 73

37.   The husband’s case basically echo’s that of the 1^st Intervener. He further says that he originally purchased 16C with the help of a loan from his sister and that it was purchased in the sole name of the wife because she had a more stable income and she also had a better relationship with HSBC.

38.   In so far as the wife’s allegation that the property had been gifted to her he adds:

12. CWM [the wife] alleged that the 16C Property and L3-73 Space were purchased with my money and given to her as a gift.  This is absolutely impossible because I could only manage to purchase the 16C Property and L3-73 Car Parking Space by borrowing $2 million odd from WFY [the sister].  I was in such dire financial situation that I needed to borrow from WFY all amount of the deposit as well as $130,000 odd for stamp duty.  With relatively low and unstable income at that time, I definitely would not buy such an expensive and new property as a gift to CWM.  All the more, CWM knew at that time that I borrowed from WFY to purchase the 16C Property and L3-73 Space.  Therefore, her allegation is completely illogical.

39.   The husband further maintains that he repaid his sister most of the money that he borrowed to purchase 16C after he sold the J property in late 1995.

40.   In June 1996 although the wife continued to hold 16C in her sole name the parties were nevertheless able to remortgage the property in their joint names for HK$4.9 million with Kwong On Bank. The husband then became responsible for the mortgage repayments. Prior to that the wife had been responsible for the mortgage repayments.

H Ltd and the purchase of 16C by the 1^st Intervener

41.   The husband’s case is that he and the wife purchased H Ltd as a vehicle for the purchase of 22D and car park space L1 13. This was an off the shelf company and they each held one share. They were both directors and the wife was also the company secretary. In order to pay for 22D they used some of the remortgage monies referred to in paragraph 40 above (a net figure of just over HK$3 million) and they took out a further mortgage on the property in the sum of HK$5 million. Thus they had two mortgages to pay – one for 16C and one for 22D. In oral evidence it was confirmed that the two mortgages together cost about HK$80,000 per month and that the family expenses were an additional HK$45,000 per month. Thus in total their monthly expenses were in the region of HK$125,000 per month and their total income far less. 

42.   It is the husband’s case that they had significantly overstretched themselves at this time and that they were facing “great financial hardship”. He explained it thus in his Witness Statement dated the 26 June 2015:

23. In the beginning of 1999, our financial burden became greater and greater, but we still could not find a buyer who would buy the 16C Property at a reasonable price.  At that time, the market value of the 16C Property with a car parking space was estimated to be around $6,000,000 to $6,300,000.  In order to relieve our family’s financial burden, and since my mother indicated that she liked living close to us and getting close to her grandchildren (my mother was all the time living with WYT [the 1^st Intervener]), CWM and I agreed, at the suggestion of WYT, to sell the 16C Property and a Car Parking Space to WYT at the price of $6,500,000.

43.   He said that there was a meeting between himself, the wife and the 1^st Intervener and that it was agreed that the 1^st Intervener would purchase 16C for HK$6.5 million. After some discussion it was further agreed that the 1^st Intervener would take the car park space L1 13 because it was wider and more convenient for wheel chair usage. (The 1^st Intervener was struck down with polio from an early age and is wheel chair bound).

44.   Instead of redeeming the mortgage on 16C immediately it was the husband’s case that they further agreed that:

25.   … it was better not to transfer the title immediately because there was still an outstanding mortgage loan of $4,600,000 for the 16C Property and L3-73 Space. If we had to repay the full amount of the mortgage loan and had the title transferred, after selling the properties there would only be around $1,900,000 cash left to us.  At the time we wished to keep more cash on hand for our monthly family expenses.  Thus, we brought along the bank mortgage statements and we showed them to WYT that the then outstanding loan was $4,600,000.  CWM and I proposed that we kept the mortgage loan and not to have the title transferred immediately.  In this way, we could have more cash for the monthly family expenses at that time and also for the partnership of leather trade business I operated with others.  WYT also accepted this proposal and that the title can be transferred later.  When I discussed this proposal with WYT, CWM was also present.

26. After discussion, we agreed the followings: WYT had to pay $3,000,000 to us within 30 days, and another $1,200,000 would be paid after WYT sold his Tanner Garden Property.  Other than that, WYT also agreed to pay half of the remaining mortgage loan, which is around $2,300,000.

27. According to this arrangement, CWM and I would get some cash in the amount of $4,200,000.  Comparing to the immediate transfer of title, we then had extra cash flow in the sum of $2,300,000.

45.   It is the husband’s case that the wife was fully aware of the agreement and that she was party to it. From then on the husband prepared a monthly apportionment account to reflect the payments made. More of that below.

H Ltd and the allotment of shares  

46.   Further both the 1^st Intervener and the husband maintain that the 1^st Intervener had offered to purchase a property from which the husband could then operate his Chinese Medicine Clinic. The idea was that the 1^st Intervener would waive the rent for a few years in order to give the husband a reasonable start. The husband added:

31. WYT [the 1^st Intervener] intended to incorporate a limited company to hold this Property.  At that time, H [the 2^nd Intervener] was only holding the 22D Property and L1-13 Space, and we did not intend to buy other properties through H either.  At that point, there was accumulated deficit in the balance sheet of H.  Thus to enjoy the tax benefit and after I discussed with CWM, we agreed to transfer all beneficial interest of H to WYT, and to let WYT buy the new property under the name of H for the operation of my clinic.  So, on 20^th September 2007, H then allotted 9,998 shares to WYT and let WYT to become H’s director.  From that time onwards, CWM, WYT and I were the directors of H.  CWM and I held 1 share each while WYT held 9,998 shares (hereinafter referred to as the “allotment agreement”).  I remembered that CWM and I both had signed the allotment agreement and the resolution approving WYT to become a director.  Yet, as we are family members, I had not specifically kept the related documents and I could not find these relevant documents now.  Having said that, in order to open a bank account, we later passed a resolution on 23^rd October 2007, resolving WYT to represent H to open an account with the Shanghai Commercial Bank.  We also signed the authorization document to authorize WYT to be the sole authorized signatory of the account.  On 4^th December 2007, we again signed and authorized WYT to open an online bank account with the Shanghai Commercial Bank.  We also authorized WYT to be the sole user of this online bank account.  Regarding the arrangement of authorizing WYT as the sole authorized signatory and sole user, I had also discussed with CWM before making the arrangement.  She understood that since 2007, all the monies that were put into H was from WYT.  Thus, she also agreed to this arrangement.

The loan of HK$2.5 million     

47.   In addition to the 1^st Intervener’s purchase of 16C and the subsequent purchase of the CBM property, it is also the husband’s case that the financial situation of the family was so poor at the time that in addition he borrowed the sum of approximately HK$2.5 million from the 1^st Intervener during the period from 2004 – 2009. These sums also needed to be repaid.

48.   Unfortunately the parties’ financial situation did not improve and in 2009 they sold 22D. It is the husband’s case that he could no longer afford the mortgage and that this was the only way for the couple to settle their outstanding debts. This meant that they no longer had a home of their own in which to live and for a short period of time the family was split. The husband makes the valid point that had they still owned 16C that they could have sold that property rather than their home. He puts it thus:

38. After selling the 22D Property and L3-73 Space, I immediately sent an email to WFY [the sister] and told her that I could settle all the debts.  A few days after I talked in the phone with WFY and WFY suggested that I need not be in a hurry to repay all the debts.  She also suggested us to utilize the profits from selling the 22D Property to buy a cheaper property as residence.  Yet after I discussed with CWM, we still decided to settle all the debts first as this debt repayment had been deferred for too long.  At that time, our plan was to wait till the business of my Chinese medicine clinic improved, and then we could rent or buy a property again when my financial condition got better.

49.   After the mortgage on 16C was redeemed following the sale of 22D the husband gave the title deeds on 16C to the 1^st Intervener.

The IR property

50.   The husband says that he was not in favour of the 1^st Intervener buying a further property for his family to live in and he was not involved with this transaction or the discussions relating to it. He reiterates that the property was solely purchased by the 1^st Intervener through the 2^nd Intervener.

The Wife’s case

51.   The wife generally pleads complete ignorance. She says that she knew nothing about the husband’s financial affairs, what he earned, what he invested in or how he maintained the family. The parties maintained separate accounts and the wife retained her money and income separately from that of the husband. It is the wife’s case that the husband purchased 16C for her and that it was a gift. This is why the property was always held in her sole name. She denies entering into an agreement to sell the property to the 1^st Intervener. In particular she denies that there was a meeting between her and the husband with the 1^st Intervener when these matters were discussed and ultimately agreed. She says that she did not receive any of the monies allegedly paid by the 1^st Intervener for the property. Further she denies that the parties were in financial difficulty or that the 1^st Intervener lent them substantial sums in addition to purchasing the property following the property market crash in 1997. She denies any knowledge of the apportionment accounts. She says that the 1^st Intervener began living in 16C with her Mother-in-law because her Mother-in-law wished to live nearer to her two grandsons. She says that she did not charge them rent because of their close family relationship. She maintains that 22D was initially purchased as an investment.  

52.   In so far as the IR property is concerned the wife’s position is that the husband and the 1^st Intervener had a number of investments that she knew little about as it was “men’s business”. This included SG Limited. However she is adamant that the husband owned 50% of the shares in SG Limited and therefore that he must have received 50% of the net proceeds of sale when the clinic was sold. The wife says that she believes that some of these funds were then used to buy the IR property. Thus she does not accept that the IR property was purchased by the 1^st Intervener with funds held solely by him. She also claims that the husband used the net proceeds of sale of 22D to put down a deposit on the IR property. She explains it thus in her witness statement:

59. In April 2010, after deciding to buy 37E, [the IR property] the Respondent organized for 37E to be purchased by H Limited, making the same financial arrangement as for purchasing 22D.  The Provisional Sale and Purchase Agreement was signed by the 1^st Intervener and I.  Later I signed the Final Sale and Purchase Agreement alone.  My understanding is that the down-payment for 37E was about HK$3,000,000.  From documents I have now discovered from H Limited they show that as at December 2009, December 2010, and December 2011, H Limited owed the Respondent HK$3,600,000, and this amount is approximately the same as the down payment for IR.  I believe that although the 1^st Intervener is holding 9998 shares in H, the Respondent is the true owner of 37E.

53.   Generally speaking she says that the family had a good standard of living and that they lived very comfortably with the boys attending good international schools. She does not accept that the 1^st Intervener helped with the school fees by paying HK$7,100 per month towards them. She maintains that this is a rental payment. She also points out that the husband drove a nice second hand car and that in 1998 they joined the Hong Kong Jockey Club.

54.   On the wife’s case the husband formed a new relationship when he was in China in 2005 and thereafter things began to change. In so far as H Ltd is concerned she points out that the allotment of shares to the 1^st Intervener took place in 2009 without her knowing about it and that she received no remuneration for this. The wife resigned as Director and secretary of H Ltd in March 2013 because she said that she felt under great stress and emotional pressure at the time.

55.   In so far as the apportionment accounts are concerned her counsel put to the husband that he borrowed HK$3 million from the 1^st Intervener in order to buy the shares in the clinic and that he then repaid the 1^st Intervener at a rate of HK$35,000 per month. This was categorically denied by the husband.     

Discussion

Credibility

56.   As will be seen it seems to me that the 1^st Intervener generally came up to proof. Although some of his explanations (and some of those of the husband) seemed a little strange at first sight they were in the main supported by entirely credible documentary evidence. Further although there may be an issue about making false statements to different government departments such as the Inland Revenue, it seems that these statements were not usually made with any ill intent, and that some of the 1^st Intervener’s actions could best be described as somewhat opportunistic. I have some sympathy for the wife who may have been ignorant of some but not all of what has transpired during the course of her marriage. However at the end of the day it would be fair to say that I did not find either the wife or indeed the husband wholly credible.      

What was the legal and beneficial ownership of the 16C property when it was purchased in January 1994?

57.   Put simply I do not accept the wife’s case that 16C was given to her by the husband as a gift. On the balance of probabilities it seems to me that the husband’s version of events is far more likely to be the correct one. This was the first property the parties bought together as a couple. I accept that given the wife’s more stable income at the time and the fact that she had a good relationship with HSBC that it made more sense for the property to be held in her sole name at first. Financially this was a stretch for the parties at the time and the husband had to borrow significant funds from his sister in order to make their dream a reality. In such circumstances it makes little sense for the husband to simply “gift” the property to the wife. It is also of note that even on the wife’s own case she then paid for the “gift” herself in that she was initially responsible for payment of the mortgage from her own salary.

58.   As I pointed out during the trial however, this matters little from a matrimonial law perspective in any event. Even if that had not been the case and the property had been owned solely by the wife, it does not follow that she would have been allowed to retain that property for her own use following the divorce. Rather it would have been prima facie included in the matrimonial pot for distribution regardless of whether it was held solely in the name of the wife or jointly in the name of both the husband and the wife or indeed if it had been held solely in the name of the husband – as is more often the case.

59.   Thus although the wife was clearly the legal owner of the property prior to January 1994, it seems to me that nevertheless the beneficial ownership of that property most probably vested in both the husband and the wife at that time. Even if that had not been the case the court would nevertheless have regarded 16C as “matrimonial property” for the purposes of distributing the assets post divorce.     

Was there an oral agreement for the sale and purchase of the 16C property and car park space L1 13 in March 1999? Consequently does the 1^st Intervener hold both of these properties beneficially?

60.   Generally speaking the 1^st Intervener’s evidence was very compelling. He was able to produce copies of cheques and one cashier order showing that he had paid the initial sums as claimed i.e. a cheque dated the 26 March 1999 for HK$3 million, plus a cashier’s order for HK$1 million dated the 3 January 2000 and an additional cheque for HK$200,000 dated the 9 February 2000. The agreement had been that the 1^st Intervener would pay the HK$1.2 million after he had sold his original TG flat. This was sold in January 2000. Thus these payments all comes up to proof.

61.   The difficulty lay in the apportionment accounts which the 1^st Intervener produced as evidence that he had paid half of the outstanding mortgage then held by the husband and wife pursuant to the agreement (see paragraph 31 – 28 (b)(i) above). I should say at the outset that the documents themselves are totally believable. I asked to see the originals which were then produced. They are in the main photocopies of both the accounts themselves with a copy of the attached cheque at the bottom of the page. They are photocopied on the back of an odd assortment of scrap paper including letters, notices ledger accounts etc. These documents are generally dated a similar time to the date of the apportionment account itself. I have no doubt at all that these are genuine documents.

62.   Some of the difficulty however lay in the content of the accounts and the fact that there is a reference to “Ah G Salary”. This is not something that had been referred to in any of the evidence before the court previously. The 1^st Intervener’s explanation is that in or about 1998 he was at a family gathering attended by the husband. The husband told him that he was concerned that he might not get loans from the banks (which he needed because he hoped to set up his own business) because he did not have a stable income. They then came to an agreement whereby part of the 1^st Intervener’s salary was to be paid to the husband direct from his company, although the husband would not infact work there. The 1^st Intervener explained that at the time his salary from his printing company which he owned with 4 others, was HK$60,000 per month. It was agreed that the husband would receive HK$35,000 per month, which he would then pay back. In addition it was agreed that he would pay tax on this sum. The 1^st Intervener received the remaining HK$25,000 per month. He said that his fellow Directors agreed with this arrangement.

63.   At first sight this arrangement seemed rather strange and counsel for the wife made great play of the fact that both the husband and the 1^st Intervener had made a false statement to the Inland Revenue. It was suggested that this arrangement could not possibly be true and that a more likely explanation was that the husband was not receiving a salary but rather rental income from the clinic owned by SG Limited.

64.   At the end of the day however the 1^st Intervener was able to come up to proof entirely. He was able to produce bank payroll forms from his company - L which showed very clearly that the husband was indeed on the payroll and that he did receive a salary from the company as had been claimed and that he had done so for a considerable period of time. It is the 1^st Intervener’s case that this arrangement continued from 1998 – 2005. The 1^st Intervener’s name did not appear on the bank payroll and he explained that this was because the owners had a separate list from that of the employees. He confirmed that he received his salary by cheque. He was also able to explain why on occasions the husband’s salary had altered. So for example everyone’s salary was reduced during SARS and again when the economy was a bit “gloomy” in 2004.

65.   Consequently I accept the basic premise of the apportionment accounts namely that the husband had to repay his “salary” to the 1^st Intervener. This “salary” altered depending on how much money he actually received from the company. It follows that the 1^st Intervener then off set his share of the mortgage repayment and paid for the management fees and other utility expenses, which were still registered in a name other than his own. (There was some dispute whether this was the name of a previous owner/tenant or the husband, which matters not for these purposes). There was also reference to a maid’s salary and it seems that the husband and wife’s maid also worked for 1^st Intervener periodically.

66.   In April 2001 the apportionment accounts changed in that the share of the mortgage reduces from one half to one quarter. The 1^st Intervener explained that the husband was again struggling financially at the time and he asked him for a loan. Instead the 1^st Intervener suggested that he pay off some of his share of the mortgage – i.e. half of what he then owed. Although the cheque cannot be produced, I nevertheless accept this explanation based on the other evidence produced. For example I have been taken to a copy of a mortgage statement dated the 6 February 2001 which shows that the mortgage outstanding as at the 6 March 2001 was HK$4,051,127.50. A handwritten note at the end of the document states that the 1^st Intervener paid the husband HK$1,012,782. I accept that to be the case. It was suggested that this note may have been written in after the event. Although possible I think that this is very unlikely in the circumstances. Further I accept that the 1^st Intervener continued to make his ¼ contribution towards the remainder of his share of the mortgage on the 16C mortgage repayment until the 22D property was sold and the mortgage redeemed in full. This happened in July 2009. Again this can be seen clearly from the apportionment accounts.

67.   At that stage the 1^st Intervener would still have owed a sum of money to the parties, being his remaining share of the outstanding mortgage repayment. This is explained as follows in counsel’s closing submission:

63. In August 2009, the Petitioner and the Respondent sold the 22D Property.  With the sale proceeds of the 22D Property, the Petitioner and the Respondent paid $2,705,647.26 to discharge the outstanding mortgage loan of the 16C Property, which was recorded in an account of the 22D Property dated 14^th July 2009 prepared by Tang Wong & Chow Solicitors [H/1882-5].

64. As the 1^st Intervener was responsible to contribute to one-quarter of the 16C Property’s mortgage (see paragraph 47 to 57 herein), the remaining obligation of the 1^st Intervener was roughly $700,000 ($2,705,647.26 /4) [A/152, WYT 1^st, §24].

65. This remaining $700,000 was paid off by the 1^st Intervener by the following arrangement:

(a) From 2004 to 2009, the Petitioner and the Respondent had borrowed from the 1^st Intervener various loans totalling HK$2,500,000 (See paragraph 39(r) herein) [A/152, WYT 1^st §23], [A/111, WYK 1^st §34].

(b) After the sale of the 22D Property, the Petitioner and the Respondent re-paid a sum of $1,800,000 to the 1^st Intervener [A/152, WYT 1^st §24], [A/114, WYK 1^st §42].

(c) The remaining $700,000 was set off against the 1^st Intervener’s obligation in the mortgage contribution for the 16C Property [A/152, WYT 1^st §24], [A/114, WYK 1^st §42].

66. The aforesaid payment arrangement was recorded contemporaneously by the Respondent in H’s solicitors’ statement dated 14^th July 2009 in respect of the sale of the 22D Property [H/1882-5].  At that time, the Petitioner and the Respondent were living together and there was no broken down in their relationship.  There was no good reason why the Respondent need to fabricate such evidence in contemplation of the marriage broken down which happened a few years later.

67. After the settlement of the mortgage of the 16C Property in July 2009, the 1^st Intervener had fully paid the purchase price of the 16C Property in sums totalling $6,500,000 to the Petitioner and the Respondent.  By reason of the matters aforesaid, the 1^st Intervener had fully performed his payment obligations under the Oral Agreement.

68. After the redemption of the outstanding mortgage in respect of the 16C Property in July 1999, the title deeds of the 16C Property were then given to and are still being kept by the 1^st Intervener.  This explains why the 1^st Intervener was not particularly zealous for asking the Petitioner and the Respondent to change the name of registered owner of the 16C Property to the 1^st Intervener.

I accept that to be the case. The fact that the 1^st Intervener was then given the title deeds to 16C also goes to support the fact that the parties accepted that he had fully complied with his obligation to pay HK$6.5 million for the property.

68.   Did though the wife know about this arrangement? In many respects this is the central point. The 1^st Intervener and the husband are adamant that the wife was present when the oral agreement was reached and that she was fully across the parties’ finances. They say that she was party to the agreement to sell 16C to the 1^st Intervener. Further they say that she was aware of the apportionment accounts and that she even drafted one such account when the husband was in Nanjing. Further the 1^st Intervener points out that she was not just a simple housewife, but someone who was active in the workplace and who had even studied law part time. How could she not have known? The wife for her part steadfastly sticks to her story that she knew nothing.

69.   On a balance of probabilities it seems to me that it is more likely than not that the wife knew about the oral agreement and the apportionment accounts. I accept that given that the apportionment accounts were drawn up over a period of 11 years when everyone was on good terms and there was no hint of a divorce that there is no reason at all for the husband to have hidden them. I also accept that it was more likely than not that the wife drafted the apportionment accounts when the husband was in Nanjing. I accept that the account of February 2005 was one such account. It is clear that the account was written in a different style entirely. I accept that the logical inference is that the wife prepared this apportionment account and therefore that she knew of the whole arrangement. I also accept that even when the husband was preparing the accounts himself that he relied on the wife to provide him with certain information e.g. the salary and other matters relating to the maids in particular.    

70.   The wife also made a number of other assertions during the trial in order to support her case. The difficulty is that she was in the main unable to provide any documentary evidence in support of what she said and her counsel was generally unable to shake the evidence given by the other side - especially that given by the 1^st Intervener. For example the wife maintained that the parties never experienced any financial difficulties. With respect this is hard to accept, even if I were to acknowledge, as I do, that the parties kept their finances completely separate. It is clear that the parties lived beyond their means and that they enjoyed a degree of comfort that was only available to them because of the generosity of the husband’s family who tried to help wherever possible. It seems to me that the wife must have been aware, for example, that it was not possible for the parties to pay for two mortgages totalling about HK$80,000 and to meet all of the household expenses in the sum of approximately HK$45,000 out of their joint incomes when they moved into 22D and where unable to sell 16C. The situation must have become worse when she was made redundant. I do not accept the suggestion that the intention was to buy 22D as an investment. Although it is possible that the wife may have been shielded from the full extent of the problem by the husband, especially given the fact that she had her own savings which she could rely upon from time to time, it is inconceivable that she was not at least partially aware of the family’s financial difficulties.

71.   Another related point concerns the 1^st Intervener’s contribution towards the boy’s education costs in the sum of HK$7,100 per month. The wife disputes this and maintains that this was a rental income owed to the husband as part of his investments with the 1^st Intervener. I do not agree. I accept that this was a genuine and generous gift. When asked why HK$7,100 and not HK$7,000 the 1^st Intervener explained that this money did come from an investment and that he had asked for his share to be made available to the parties for the boys education. It just happened to be for HK$7,100 per month. I accept what he says in that respect.

72.   As indicated above I do not accept the wife’s assertion that the reference to the husband’s salary in the apportionment accounts in fact related to a loan of HK$3 million paid by the 1^st Intervener to the husband so that the husband could in turn buy 50% of the shares in SG limited. I accept that this is completely speculative and without any foundation whatsoever. Likewise there does not appear to be any evidence to support the wife’s claim that the husband must have received half of the net proceeds of sale from the clinic when it was sold in August 2007. Again this appears to be pure speculation and as such will be given no weight.

73.   All in all I accept that the 1^st intervener is the beneficial owner of both flat 16C and car park L1 13. I agree that had that not been the case the wife would have suggested selling 16C as opposed to 22D back in 2009. Generally it seems to me that the figures add up in a way that would be very difficult to disguise. For the avoidance of doubt I accept that the 1^st Intervener paid to the parties the sum of HK$6,500,000 in order to purchase 16C and car park space L1 13.

74.   Ultimately I accept that the 1^st Intervener genuinely purchased 16C and that he did so in part to assist the parties who were in significant financial difficulty at the time.

Did the husband borrow the sum of HK$2.5 million from the 1^st Intervener?

75.   The 1^st Intervener and the husband were largely able to come up to proof in relation to some, but not all of this sum. HK$1.33 million was documented with copies of cheques etc. Generally speaking however, I accept the 1^st intervener’s version of events. Notwithstanding the lack of documentary evidence to support their case I accept that the husband borrowed approximately HK$2.5 million from the 1^st intervener and that he and the wife were obliged to repay that sum.

Further does the 2^nd Intervener own the IR property or is it a matrimonial property to be included in the matrimonial pot for distribution between the parties?   

76.   I accept that the 1^st Intervener was wholly responsible for all of the purchase price and related expenses for the IR property. I do not accept the suggestion that the net proceeds of sale from 22D were somehow used to purchase this property in part. As indicated above I accept that monies were owed by the parties to the 1^st Intervener and that HK$1.8 million was repaid to him upon the sale of the 22D property. This is a property owned by H Ltd. Ultimately I accept that the 1^st Intervener is the sole beneficial owner of this property and that as such it cannot be included in the matrimonial pot for distribution between the parties.

Other points

Further allegations made against the husband

77.   During the course of the trial a number of allegations were made against the husband with respect to his accounting practices and in particular to the way in which profits were booked in the accounts of KC and SG Limited in order to take advantage of accumulated losses in the 2^nd Intervener’s accounts. Great play was made of this by counsel for the wife, presumably with the intent of discrediting the husband’s evidence generally. It is of note that no questions were raised in this respect prior to the trial despite two requests from the wife to the husband for interrogatories. I accept that the onus was on the wife to have raised this much earlier than she did and that no criticism can be made of the husband for not dealing with it – given that he did not know that it was an issue.

78.   Counsel explained it thus in his closing:

(a) The rental income from KC Limited and SG Limited was an accounting arrangement for tax benefits between companies with common shareholders.  It was done by booking the profits in KC Limited, and subsequently SG Limited to H Limited, which was then suffering from losses.

(b) By means of the arrangement of renting the 22D Property to KC Limited and SG Limited during different periods, a rental expense would appear in the accounting books in KC Limited and SG Limited and a rental income would appear in the accounting books of H.  For KC Limited and SG Limited, it had an effect of cancelling out their profits.  On the other hand, for H, this rental income would be cancelled out by its losses which were generated through various management expenses and utilities.  For H, this rental income would remain as account receivable; and for KC Limited and SG Limited, these rental expenses would remain as account payable.  In reality, no actual money was transferred from KC Limited and SG Limited to H as it was merely an arrangement for tax saving purpose.

(c) Such arrangement is lawful as there was no overlap between the rental to KC Limited and the rental to SG Limited.  H, as the owner of the 22D Property, is permitted to rent out the property to another company whereas KC Limited and SG Limited were also permitted to rent properties for their director, namely, the Respondent, to reside in.  This arrangement with KC Limited was done in 1998 [C/456], and with SG Limited in 2002 to 2007 [C/510], [C/524], [C/543], [C/558], [C/584], [C/609].  Such arrangement was still legal and legitimate even though the Respondent was the common shareholder and director of KC Limited and H, and later SG Limited and H.  Moreover, the Respondent was physically residing at 22D Property in the respective periods.

(d) Had there been anything unlawful, the accountants and auditors would not have endorsed on the audited reports reflecting the aforesaid arrangements.  The audited reports had been certified by H’s auditors and submitted to the IRD for their reference.

79.   The difficulty is that this is a wholly artificial device that has no basis in reality. Counsel for the wife says that it was “clearly dishonest and illegal”. Further the husband’s explanation altered several times. All in all I tend to agree that on the face of it there is a potential difficulty with the explanations given by the husband. However it does not follow that just because a witness has been dishonest about one aspect of his case (and to be fair this was not even a point that was contained in the original pleadings) that it follows that the witness is not to be believed on other aspects of his case. As indicated above I generally accept that the 1^st Intervener came up to proof with respect to the case that he presented. The husband was less credible generally, but believable with respect to the case that he presented with the 1^st Intervener on 16C, the apportionment accounts, the borrowing of funds etc etc. I did not find the wife particularly credible either and there was a sense that she was clutching at straws. Certainly her case was in the main highly speculative. 

The audio tapes

80.   The wife produced two transcripts of audio tapes dated the 5 March 2013 and 16 June 2013 to support her case. The husband was not aware that the conversations were being recorded. To a large extent the recordings simply rehearse the arguments made in court. I do not consider that they assist the court very much one way or another and I have not attached very much weight to them when coming to my decision.     

Costs       

81.   Given that the 1^st Intervener has largely been successful in his application it follows that costs should follow the event. Thus there shall be an order nisi to be made absolute in 14 days time that the Petitioner wife shall pay the 1^st and 2^nd Intervener’s and Respondent’s costs of and arising out of the Points of Claim dated the 2 February 2015 on a party and party basis to be taxed if not agreed.  

Conclusion 

82.   Consequently an order shall be made as follows:

a) It is declared that the 1^st Intervener is the sole beneficial owner of the 16C property and the related car park space L1 13.

b) It is further declared that the 1^st Intervener is the ultimate sole beneficial owner of the IR property which in turn is held in the name of the 2^nd Intervener. The 2^nd Intervener is the legal owner of the property.

c) It is not open to the court to make orders with respect to the other claims made in the pleadings given that they stand outside the remit of the Family Court.

d) There shall be an order nisi to be made absolute in 14 days time that the Petitioner shall pay the 1^st and 2^nd Intervener’s and the Respondent’s costs of and arising out of the Points of Claim dated the 2 February 2015 on a party and party basis to be taxed if not agreed.