YICK YEE LIN JOSEPHINE v. CHUNG WING CHARN

CACV 254/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 254 OF 2000

(ON APPEAL FROM FCMC NO. 1537 OF 1984)

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J U D G M E N T

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1. This is the judgment of the court. This is an appeal from a decision and judgment of Deputy Judge Geiser given on 22 May 2000. The application heard by the Deputy Judge was an application to vary a maintenance order which had been made in October 1984 in the sum of $1 per annum. The petitioner applied for a lump sum payment which was apparently put at $1.8 million and in the alternative for a monthly sum. The judge dismissed the petitioner's application for a lump sum payment but granted the petitioner maintenance for herself of $10,000 per month for a period of two years, the first payment to be in June 2000. In so doing the judge took into account the fact that there had already been a series of payments on a monthly basis made pursuant to an interim order. By the date of the hearing they had amounted to $252,000.

2. The petitioner appeals the decision of the Deputy Judge. In this court she seeks an order that there should be a lump sum payment of $1.8 million or in the alternative that the monthly payments of $10,000 per month should continue until her death.

The background

3. The petitioner and the respondent were married in May 1968. The petitioner was a teacher by profession. The respondent was an employee of a multi-national trading company. They had two sons. The first was born in 1969 and the second in 1970.

4. Unfortunately the marriage broke down and the parties separated probably in about 1980 or at least soon thereafter. The decree nisi was made as long ago as October 1984. At that stage the petitioner was earning about $14,000 to $15,000 dollars per month. The respondent on the other hand was earning in the order of $18,000 per month. The respondent looked after the children following the divorce. On the making of the decree nisi the petitioner was awarded the sum of $1 per year. That was an order which was made by consent.

5. The petitioner continued to work as a teacher until 1994. She was then aged 53 and she decided to retire. She claims that she retired because of ill health. That was not accepted by the judge. The petitioner received a provident fund payment of approximately $1.2 million when she resigned. That money has all disappeared. Apparently $500,000 went to support bank facilities for her younger brother who was operating a shoe business. The sum of $500,000 was taken by the bank. The petitioner also gave one of her sons some $300,000 to support him in commencing his own business. This has also not been recovered. The petitioner has apparently borrowed money since 1996 in order to support herself. She now owes about $165,000.

6. The respondent on the other hand has faired much better. The respondent left his employment in 1987 and received a provident fund payment of something over $600,000. With that payment he formed a company named Pan Wings Company Ltd. The judge noted that this was 7 years after the parties had separated and three years after the divorce. The judge found the respondent's financial position to be quite complicated due to the fact that he had acquired various properties and due to his involvement in Pan Wings Co. Ltd. There were a number of properties which the respondent had acquired either in his own name or jointly and also in the name of Pan Wings Co. Ltd. The respondent was subjected to something in the order of five days cross-examination and the judge remarked in his judgment that he had been the subject of extensive discovery as to his assets.

7. The judge's conclusion was that he was not particularly impressed with the respondent as a witness. He felt that he had down-played his financial position and much of the evidence particularly regarding the financial position of Pan Wings Co. Ltd. The judge said that it left him with a sense of disquiet. Nevertheless, taking account of the "breathtaking" amount of disclosure which the judge referred to in the judgment, the judge clearly had a reasonable idea of the extent of the respondent's assets.

8. As regards the petitioner, the judge held that the petitioner did not have health problems which caused her resignation in 1994. The judge was satisfied that the petitioner did have high blood pressure problems. However, on the medical evidence he was satisfied that the problem was not serious and was being properly managed. The judge said that the petitioner's assertion that she is unable to work due to her poor health was misconceived. The judge considered that the petitioner gave the impression of being a malingerer and was quick to exaggerate her health problems. He also found that it was more likely than not that the petitioner had an interest in a flat in China. That, the petitioner was not prepared to concede.

The present appeal

9. It is, of course, clear that in exercising the powers under section 11 of Matrimonial Proceedings and Property Ordinance, Cap. 192 the court is exercising a discretion. It is trite law that this court will not interfere with the exercise of a discretion unless it is clearly wrong or has been exercised either on the basis of taking into account facts which should not have been taken into account or not considering facts which should have been taken into account or was in some way flawed in respect of the law. As has been said in the cases, it is only where the exercise of a discretion exceeds the generous ambit within which reasonable disagreement is possible and is plainly wrong that an appellate court is entitled to interfere.

10. It is to be noted that in the Notice of Appeal the petitioner seeks, in one of the alternatives an order for a lump sum payment. Section 11(5) of the Matrimonial Proceedings and Property Ordinance provides :

"(5) No such order as is mentioned in section 6 shall be made on an application for the variation of an order made by virtue of section 4(1)(a) or (b) or section 5(2)(a) or (b), and no order for the payment of a lump sum shall be made on an application for the variation of an order made by virtue of section 4(1)(a) or (b) or of section 8(6)(a) or (b)."

11. Since the order for $1 per month, which was made in 1984, was an order which comes within section within section 4(1)(a) of the Ordinance no application could without leave be made for a lump sum payment. However, Mr Pilbrow, who appeared for the respondent, said at once that since objection was not taken in the court below, this point would not be relied upon in this court and that he was prepared to deal with the matter on the basis that appropriate applications had been made to claim that relief at this stage.

12. In our view, however, an order for a lump sum payment would, on any footing, be wholly inappropriate in this case. Not only is there no indication as to how the petitioner would seek to use such sum, but the past experience with the $1.2 million provident fund payment demonstrates that the petitioner is unlikely to be competent to make proper use of a lump sum.

13. The main criticism of the judge below made by Mr Lam, on behalf of the petitioner, was that it was said that he failed to make necessary findings of material facts. Specifically, it is said that the judge did not make findings as to the financial needs of the petitioner. Further it is said that the judge should have made further inquiries into and made specific findings as to the assets of the respondent. In his written submissions Mr Lam went so far as to suggest the judge seemed to be unduly biased in favour of the respondent.

14. In our view the judge approached the matter in entirely the correct way. Having referred to the length of time since the marriage had broken up and the fact that the wife had lived on her own and kept herself for many years in circumstances where it might be reasonably supposed that she would maintain herself, the judge went on to say that he found little merit in the petitioner's application. It was, therefore, more as an act of charity that he made the order for maintenance. He said :

"However despite this and in order to assist the petitioner in putting her affairs in order I am prepared to order the respondent to be responsible for her expenses which I have assessed at $10,000 per month for another two years."

15. It is clear that when a court considers the exercise of its powers under the provisions of the Ordinance relating to maintenance it must have regard to all the circumstances of the case. Section 7 of the Ordinance reads :

"(1) It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring."

16. The Judge indicated that he had taken all these matters into account and we see nothing in his decision to indicate otherwise.

17. The conclusion reached is in our view entirely reasonable and consistent with findings of fact. The judge found that the petitioner's reasonable living expenses were approximately $10,000 per month. He ruled that he was not satisfied that the petitioner did not have an interest in a flat in China. He found her to be a malingerer and was not satisfied that she was incapable of work. No estimate was made as to what the petitioner could earn, but it has to be observed that it would not be unreasonable to expect a retired teacher to take on extra coaching or tutorial work or some similar part time employment. The petitioner had lost her own money by lending it to her brother and lending it to her son. In the circumstances it seems entirely reasonable that the petitioner should look to those persons to whom she had lent money to recover the bulk of her money particularly as they were close relatives.

18. The husband's newly acquired wealth was made entirely after the marriage had been dissolved for some years and indeed well after the divorce. Although he remarried somewhat later, he had lived with his new wife since about 1981. Insofar as the judge made no finding as to the respondent's financial circumstances it is clear that he approached the matter on the basis that the respondent was to a large extent financially well off.

19. The position at the breakup of the marriage was that the petitioner was earning only slightly less than the respondent. Nevertheless the respondent took on the responsibility of the two children of the marriage and brought them up. At that stage the petitioner had a reasonably long working life ahead of her. In 1994 she decided to retire. That was a matter of her own choice. She could have gone on working. If she had gone on working her income would have continued and, no doubt, she would have augmented her provident fund payment.

20. During the period from the breakup of the marriage until the end of her normal working life the petitioner could have been expected to make provision for her retirement insofar as the provident fund would not have been expected to so provide.

21. These factors, it seems to us, impinge upon the relevance of the length of time before November 1997 when the application for maintenance was made. The judge expressed it in this way : "He must have thought in 1984 upon the making of the decree absolute that these proceedings were at an end and can only have been astonished to discover in October 1997 that these proceedings were being revisited and old wounds opened up some 13 years later."

22. This passage was criticised by Mr Lam on behalf of the petitioner. In our view, however, the judge's approach was correct. He was justified in saying that he considered that the lapse of time which had taken place after the breakup of the marriage and indeed the divorce proceedings and the application for maintenance was an overriding consideration. In so saying, of course, it is not said that this was the only consideration. It was, however, highly relevant in the particular circumstances of this case where the parties could have been expected to be independent of each other and where the husband had of his own efforts and the efforts of his new wife, entirely after the separation and the divorce, acquired such wealth as he had.

23. In this respect the decision of Cairns LJ in Lombardi v Lombardi [1973] 1 WLR 1276 is instructive. It was a decision of the Court of Appeal in 1973. In the course of his decision Cairns LJ said that the judge below had not been wrong in taking into account the long lapse of time since the marriage had broken up. Likewise the judge had not been wrong to take into account the fact that the husband had acquired a substantial fortune after the breakup of the marriage, his new-found fortune was in part due to the work of the lady with whom the husband was then living. Similar considerations are relevant in this case.

24. In short, we see no basis for interfering with the exercise of the judge's discretion. In so saying we would not even go so far as to indicate that we may have come to a different conclusion. The judge below was, in our view, generous to the petitioner. Insofar as the judge has said that the order he made should ensure a clean break between the parties at the end of the two-year period, we agree that the matter is best viewed in that spirit, though that does not absolutely preclude a change should exceptional and genuinely dramatic circumstances so require.

25. In our view this appeal should be dismissed with an order nisi as to costs in favour of the respondent.

26. Before concluding it is appropriate to mention a number of matters.

27. In this Court the petitioner has produced a wealth of documentation which has been copied for everybody. This has resulted in many extra bundles being produced. Almost nothing of it outside the Core bundle has been referred to.

28. Furthermore a transcript was made of the evidence. Almost none of that has been referred to. There was no effort even to request a selected part of the evidence.

29. The cost of preparation of this unused extra documentation is clear. It is not only a waste of time, it is a waste of expense and, of course, it is a waste of paper.

30. If parties and their legal advisers are not certain as to whether a document will be referred to, a single set of such documents can be held available for reference if required. The indiscriminate copying of all documents cannot be justified, nor should those responsible for control of costs sanction it.

31. There is another matter too. In the Court below the cross-examination of the respondent appears to have been both exhaustive and exhausting. At the end of the fourth day of the cross-examination, the judge had to remind Counsel that he should not be repetitive. The judge warned Mr Lam that it might be necessary to curtail his cross-examination. Such warning appears to have been amply justified and, if we might say so as a matter of encouragement and not of criticism of a judge who was obviously bending over backwards to be fair throughout, somewhat overdue. Despite that, the cross-examination continued, in total there were 5 days of cross-examination in a case where the relevant facts could surely have been brought to light far more quickly.

32. As has already been observed the judge referred to the "breathtaking" amount of discovery.

33. It is relevant to consider all this extra work entailing extra costs in the light of the fact that the petitioner was legally-aided throughout and the respondent has had to bear his own costs. Such a situation, in itself, is apt to produce an undesirable imbalance in the relative positions of the parties. Each one of the matters to which we have referred have been brought about by the advisers of the petitioner. Whatever steps they have taken, have been taken in the knowledge that their client was legally aided.

34. In summary it appears that the conduct of these proceedings has verged upon the oppressive.

35. One is reminded of two cases. The first is a divorce case. In Fraser v Fraser (1982) 3 FLR 98 Lord Denning said at page 100 :

"The judge realised-as we realise-that the wife here is legally aided. I am quite sure that, if she had to pay her own costs, none of this long detailed discovery in the light would have been incurred. She, being legally aided, has brought this case against the husband who is not legally aided. He has had to fight the case on his own means. It seems to me entirely oppressive that legal aid should be used in these circumstances to put this burden on the husband."

36. These observations appear to be pertinent in this case too.

37. The other case that is brought to mind is the case of Ungar v Sugg 9 RPC 113. At page 117 Lord Esher said in that case :

"Here therefore we have these shorthand notes with which we have been troubled. Mr. Daniel ... never would have taken down all that rubbish which is contained in these books if he had made his own note, or if the Counsel with him had made the note .... There was no occasion for a shorthand note; and if anybody has to pay for these shorthand notes other than the actual people who ordered them, all I can say is it is a burden upon their clients which ought not to be put. As for any Taxing Master allowing these shorthand notes, I hope to goodness there is not one in the place who ever would allow them. As between party and party it would be monstrous to allow them. As between solicitor and client, I should think that the Taxing Officer would look very closely indeed, and see whether the doing of these things had been authorised by the client after it had been explained to him what the consequences would be."

38. These observations too appear to be pertinent in this case. It is to be hoped that the Taxing Master and the Director of Legal Aid will bear them in mind at the relevant time not just in relation to the transcript but in relation to the other aspects of the conduct of the case to which we have referred.