WMC v. STW

11.  I will, for the sake of convenience, refer to paragraph (3) of the Order dated 6 February 2009 (as amended on 2 June 2009) simply as “Macau shares transfer Order”.   I will refer to the Respondent’s bank account with China Construction Bank (Macau) Corporation as “CCB (Macau) Account”.

The Petitioner’s case

12.  The Petitioner’s case is that the terms of the Macau shares transfer Order required the Respondent to transfer the shares or the value of its worth in the CCB Account by reference to the findings made by the learned Judge at the ancillary reliefs trial.  The learned Deputy Judge Tracy Chan in paragraph 47 at page 18 of the Judgment said :

“This account is in sole name of Husband. As at August 2008, the stocks in the CCB Macau Account were worth    $1,376,500. ……..”

13.  It can also be seen from the 1 August 2008 bank statement that there were 100,000 NCPC shares, 25,000 Weichai shares and 30,000 Xiamen shares within the CCB Account.  The total value of these shares at that time was $1,376,500.

14.  On 14 September 2010, the Respondent through his Solicitors tendered a cheque in the sum of HK$10,220 representing half of the worth of 200 shares of Manulife which remained within the CCB (Macau) Account around that time.  The Petitioner is now claiming the difference or such sum as this Court may found the Respondent is liable to pay under the Macau shares transfer Order.

The Respondent’s case

15.  The Respondent had not filed any Affirmation in Opposition to the February Summons.  Counsel for the Respondent Mr. Enzo Chow confirmed reliance would be placed upon the Affirmation filed in opposition to the December Summons for today’s hearing to oppose the February Summons.

16.  The Respondent in his Affirmation sets out his grounds of opposition under 3 headings, namely :

(a)  The wordings of the Macau shares transfer Order;

(b)  Due compliance of the Macau shares transfer Order; and

(c)  Fairness.

17.  On heading (a), it was argued that there was never any restriction, whether before, by or after the Order, against sale or disposal of any shares in the CCB (Macau) Account or the sale proceeds thereof.  The Macau shares transfer Order does not include any money balance in the CCB (Macau) Account or in the settlement account.

18.  Moreover, the Macau shares transfer Order was not a subject matter of his appeal (under CACV No.162 of 2009) against the ancillary reliefs Judgment.  If the Macau shares transfer Order should imply more than its literal meaning, he would have included it in his appeal.

19.  On heading (b), the Respondent said he had sent over half of the value of shares in the CCB (Macau) Account in the sum of HK$10,220 together with the latest monthly statement with previous close.  He had also sent over monthly statement dated 1 August 2009 onwards since the date of transfer, but for the stay of execution, should have been 5 July 2009.

20.  On heading (c), the Respondent referred to and exhibited his monthly statement dated 1 November 2008 which showed that there had already been a substantial drop of the share values down to HK$695,800.  This statement shows the same 100,000 NCPC shares, 25,000 Weichai shares and 30,000 Xiamen shares within the CCB (Macau) Account.

21.  As part of heading (c), the Respondent referred to the transfer of the Begonia property to the Petitioner. Although it was not ordered by the Court, he had been paying the mortgage payments of this property between the time of the Judgment in 2009 and the actual transfer around August 2010.  The outstanding mortgage sum on this property was reduced by $590,000 because of the monthly mortgage repayments he made during that period of time.  This brings in the result that the net value of the Begonia property transferred to the Petitioner was increased by a sum of $590,000. The Respondent referred to the Petitioner having had received an extra benefit already.

22.  Besides, Mr. Chow for the Respondent also raised an issue on procedure and jurisdiction.  The Order of 6 February 2009 (as subsequently amended on 2 June 2009) was engrossed, sealed and perfected on 18 February 2009.  Relying on the case of Andayani v. Chan Oi Ling [2000] 4 HKC 233, applying Millensted v. Grosvenor House (Park Lane) Ltd [1937] 1 KB 717, the learned Deputy Judge Tracy Chan was functus officio after the perfection of her Order.  The learned Deputy Judge had no jurisdiction to ‘re-open’ the issue by her written note/comment.  Moreover, such written note/comment of the learned Deputy Judge went far beyond the permissible boundary of clarification and is not something which is allowed by the ‘liberty to apply’ clause under the 6 February 2009 Order.

Are the terms of the Macau shares transfer Order clear ?

24.  For the sake of completeness, I recite the terms as follows :

“The Husband shall transfer one half of the shares in China Construction Bank (Macau) Corporation Limited Account No.xxxxx or its worth at the date of transfer to the Wife within one month upon the pronouncement of the decree Absolute”

The appeal under CACV 162/2009 (“the Appeal”)

25.  The Respondent lodged the Appeal seeking to set aside the ancillary reliefs Judgment and have it replaced by a lump sum of HK$3 million.  Execution of the Judgment, including the Macau shares transfer Order, was stayed pending outcome of the Appeal.  The Appeal proper was disposed of on 7 June 2010 and the question on costs of the Appeal was also finalised on 6 September 2010.  Suffice is to say that the Appeal was only partly successful.  It is common ground that the Macau shares transfer Order remained intact after the Appeal.  The Respondent also concedes that the Macau shares transfer Order was not made the subject of the Appeal.

26.  The decree absolute was pronounced on 5 June 2009.  But for the stay of execution pending outcome of the Appeal, the time for compliance with the Macau shares transfer Order should have been before 4 July 2009 (i.e. within 1 month upon pronouncement of the decree absolute). 

27.  To start with, it is plain and obvious from the terms of the Macau shares transfer Order that it comprises 2 components; namely, (a) an act of transfer; and (b) the time for performing such transfer.

Act of Transfer

28.  The Respondent was given an option to elect the subject matter to be transferred, namely, either half of the shares in the CCB (Macau) Account or its worth at the date of transfer.  This part of the Order, in so far as the act of transfer required of the Respondent, is clear and unambiguous.

29.  It is common knowledge that share values may vary from time to time even within minutes.  The fact that the Respondent had been given such an option, he might, if he so wished, keep the actual shares rather than transferring them and then acquiring the same kind and quantity of shares back from the open market.  So he could work out how much those of the half shares worth and transfer such amount to the Petitioner.  The value of those of the half shares would have to be ascertained, under the terms of the Order, as at the date of the transfer.  This is, in all sense, simple logic and clear. 

30.  In my view, the words “at the date of transfer” immediately following the words “its worth” are nothing more than expressing such simple logic by clear words.  The words “its worth” and “at the date of transfer” must be read and considered conjunctively and in context and construed as a single term.  The first option on transferring half of the shares in the CCB (Macau) Account requires no further explanation. It is the second option of transferring the values of those half of the shares would have to ascertain ‘its worth” by reference to a specific moment in time.  In my decision and finding, it is to be valued as at the date of transfer. 

31.  There is, however, the latent problem of there always a difference between, say for example, 1000 shares of stock “A” and the share values in money terms of this 1000 shares of stock “A”.   The former bears the notion of an invariable fixed quantity of shares (without having to quantify in money terms) whereas the latter involves a quantification in money terms which will fluctuate from minute to minute.  

32.  The first component of the Macau shares transfer Order requires simply an act of transfer to be done.  The Respondent in paragraph 3 of his Affirmation referred to the Macau shares transfer Order does not include any money balance in the CCB (Macau) Account, in my view, have missed the point.  What is required of from the Respondent, from my reading of the terms, is just the act of transfer and nothing further than that.   

33.  The Respondent in paragraph 4 of his Affirmation conceded the Macau shares transfer Order was not a subject matter of the Appeal.  The Petitioner had never appealed on the terms.  If the terms would imply more than a literal meaning, he himself would have included the Macau shares transfer Order in his appeal.  I have two observations.    

(a)  First, the Petitioner is not arguing the terms to bear a meaning other than its literal meaning.  The Petitioner is now simply seeking a construction of the terms as they now stand so as to reflect the intention of the Court at the time when the   Macau shares transfer Order was made.  The Petitioner accepts the terms as they now stand.  This explains why the Petitioner had not appealed.

(b)  Secondly, and in any event, the outcome of the Appeal had no impact whatsoever on the Macau shares transfer Order which had never been the subject matter of the Appeal. The Respondent was required to perform the act of transfer whatever the outcome of the Appeal would be.

Time for performance

34.  The second component of the Macau shares transfer Order stipulated a period of time within which the act of transfer was to take place, namely, within 1 month upon pronouncement of the decree absolute, which is, before 4 July 2009.  Decree Absolute was pronounced on 5 June 2009.

35.  I believe the fundamental problem here rests with the time for transfer having been fixed by reference to a period of time (that is, within 1 month) as opposed to a particular date or time (my emphasis).  Given the subject matter is shares with values which can fluctuate every minute, even to specify a particular date for transfer would attract the problem of share values being different from minute to minute in the stock market.  Then, when is the cut-off time even with a particular date for transfer being specified ?

36.  The Macau shares transfer Order, in my view and with due respect to the trial Judge, requires some form of clarification in terms of which day (for the time being let alone the fact of share values do fluctuate every minute) within the 1 month was the share values to be ascertained if the Respondent elected the option of making transfer of share values as opposed to transferring half of the actual quantity of shares.  Clarification will be needed in any event even in the case of transferring half of the actual quantity of shares since the time frame for either one of the two options of transfer is “within 1 month” as opposed to a specific date in the month.

37.  For the above reasons, I find the terms of the Macau shares transfer Order, for the sake of implementation, do require some form of clarification.   I will deal with this issue in the later part of this Decision.

Is there ‘due compliance’ by the Respondent ?

38.  Although I have found the Macau shares transfer Order requires clarification, this is however not the issue to be determined by this Court for the purpose of the February Summons. 

39.  The Petitioner is now claiming incomplete compliance by the Respondent in that the full payment ordered to be paid had not been paid.  On the other hand, the Respondent is arguing that he had fully complied with the terms of the Macau shares transfer Order according to the plain and literal meaning of the Order when he made the payment of HK$10,220 on 14 September 2010.

40.  If one compares the CCB (Macau) Account portfolio under the 1 August 2008 statement (at page 120 of the Bundle of Documents) when there were 100,000 shares of CNPC, 25,000 shares of Weichai and 30,000 shares of Xiamen at that time where the aggregate value worth $1,376,500 with the 1 August 2009 statement (at page 142 of the Bundle of Documents) of only 200 shares of Manulife Financial Corporation at that time which worth $37,860, it can be seen there was a change in kind and quantity of shares.  More importantly is the significant difference in money values of about $1.33 million less.  To be precise, it is $1,338,640 (i.e. $1,376,500 - $37,860). 

41.  Accordingly, the central issue is whether there had been full compliance as ordered ?  If yes, the Petitioner fails.  If no, apart from the payment of HK$10,220, how much the Respondent has to pay under the terms of Macau shares transfer Order ? The answer falls upon interpretation of the Macau shares transfer Order. 

42.  It can be seen that the Respondent’s alleged full compliance focuses upon the words “at the date of transfer” without  consideration of the “1 month” time frame and also the issue I raised above as to which day within the “1 month” was to be adopted.   Since I have already found under paragraph 30 of this Decision that the words “at the date of transfer” are to be read in context conjunctively with the preceding words “its worth” and construed as a single term (my emphasis) for specifying the time for valuation, the issue remaining would then be whether the payment made on 14 September 2010 (the amount of HK$10,220, being half of the value of the shares remaining in the CCB (Macau) Account and valued as at the date of transfer) can be accepted as due compliance of full payment.  

43.  The stay of execution order had put the implementation of the Macau shares transfer Order on hold.  But for the stay, the transfer should have taken place in a day within the 1 month upon pronouncement of the decree absolute, that is, between 5 June 2009 and 4 July 2009.  The stay was gone when the Appeal proper including costs of the appeal was finally disposed of on 6 September 2010. What would then be the parties’ positions ?

44.  In my view, there is always a difference between deferring the time of an act to be done under a court order and altering the material and substantive terms of the order itself.  Stay of execution orders would, for all purposes and intent, only defer the time of performance.  Once the stay is gone or uplifted, the parties bound by the terms of the Order would then have to perform it at the earliest possible moment and to the fullest possible extent according to the material and substantive terms of it. 

45.  In my decision, the second component of the Macau shares transfer Order, namely, the stipulated time frame of “within 1 month upon pronouncement of the decree absolute” is a material and substantive term on time for the act of transfer which cannot be altered, subject only to clarification needed on which day within the 1 month was the transfer to take place.  The stay of execution order obtained by the Respondent could not, in my view, have the effect of altering such material and substantive term on time for the act of transfer to any other dates beyond the stipulated time frame.

46.  On such a finding, the Respondent would therefore have to go back to the material and substantive terms of the Macau shares transfer Order and have it implemented to the fullest possible extent after the stay of execution.  This would be an act of transfer of half of the quantity of shares or the value of its worth valued, according to the material and substantive term on time under the Macau shares transfer Order, on a day within the 1 month upon pronouncement of the decree absolute, that is, between 5 June 2009 and 4 July 2009.  In my decision, it is wrong for the Respondent to take advantage of the stay of execution which had only deferred the time of performance and then made use of it to alter the material and substantive term on time for transfer under the Macau shares transfer Order.

47.  For these reasons, I find the Respondent’s payment of HK$10,220 made on 14 September 2010 not to be accepted as due compliance of the Macau shares transfer Order or anything close to it. 

What is the amount payable ?

48.  Now it comes to decide how much the Respondent actually has to pay to discharge the Macau shares transfer Order ? 

49.  The Petitioner in her 10^th Affirmation at paragraph 8 sets out 2 Tables (Table A and Table B at pages 176 to 179 of the Bundle of Pleadings) for comparison of the share values within the CCB (Macau) Account at different material times.  Table A shows the aggregate values of 100,000 shares of CNPC, 25,000 shares of Weichai and 30,000 shares of Xiamen calculated as at 8 different dates.  Table B shows the value of  the 200 shares of Manulife Financial Corporation which was the only share remaining in the CCB (Macau) Account around the time of transfer on 14 September 2010 calculated at 9 different dates.  All the closing prices are obtained from the Yahoo Finance website which the Respondent took no objection on the price quote. 

50.  Since the learned Deputy Judge Tracy Chan decided to give the Respondent the benefit of 1 month upon pronouncement of the decree absolute to do the transfer, I find that it is fair and reasonable to adopt the last day of this 1 month period (that is, 4 July 2009) for ascertaining the shares worth.  If I adopt a date before 4 July 2009, this would mean I myself had altered the material and substantive term by cutting short the 1 month.

51.  Given the fact that the Respondent had adopted the second option of transferring shares worth of HK$10,220 in purported compliance, I believe it is fair and reasonable for me to determine the Respondent’s obligation towards discharge of the Macau shares transfer Order by transferring shares worth rather than by transferring half of the actual quantity of shares in the CCB (Macau) Account.   I think this is fair and realistic.  Otherwise, the Respondent may now have to acquire the same kind and quantity of shares from the stock market at the current market price.  There may be a sharp difference between the current market price and the shares worth as at the date which I adopted, namely, 4 July 2009.

52.  At this juncture, I should also mention that the Petitioner in her 10^th Affirmation at paragraph 15 confirmed she would not pursue on any bonus shares entitlement which the Respondent might have received.  She would confine her claim upon the 100,000 shares of CNPC, 25,000 shares of Weichai and 30,000 shares of Xiamen which were in the CCB (Macau) Account in August 2008 referred to by the learned Deputy Judge Tracy Chan in her Judgment dated 6 February 2009.

53.  I now decided the shares worth, according to Table A, would be HK$1,294,250 as at 4 July 2009.  Half of this amount is HK$647,125.

54.  Mr. Chow in paragraph 29 of his written submissions also contended that the learned Deputy Judge Tracy Chan at paragraph 47 of her Judgment was merely referring to a statement of fact that on a specific date the shares portfolio within the CCB (Macau) Account was worth a certain amount.  The learned Judge was then referring to the portfolio in the August 2008 statement.

55.  With respect to Mr. Chow, such contention cannot stand.  The reason being that the Respondent had not contested in his appeal that the learned Judge was wrong in her computation of assets by referring to such statement of fact in her Judgment.  In the absence of such a contention, it is far too late for the Respondent to now raise such a contention here which, if I understand it correctly, is to say that the portfolio under the August 2008 statement did not exist throughout the whole period of trial up to October 2008.  The 11-day trial, however, lasted from April to October 2008 including the month of August. 

Issue of ‘Fairness’ ?

56.  At paragraph 8 of the Respondent’s Affirmation, he referred to the share prices which worth about HK$1.3 million to have dropped to around HK$695,800 in November 2008.  Since I have found and adopted the date of 4 July 2009, any rise or fall in the shares prices before this date is neither here nor there.

57.  At paragraph 9 of the Respondent’s Affirmation, he referred to the Petitioner having received an extra benefit to the extent of HK$590,000.  This is because of his monthly mortgage repayments of the Begonia property between the time of Judgment in February 2009 and the actual transfer to the Petitioner in August 2010.  As a result, the outstanding mortgage loan was reduced by HK$590,000 which led to the effect that the value transferred to the Petitioner was increased by this amount.  Mr. Chow for the Respondent in his written submissions invited this Court to take this sum into account on fairness principle.

58.  Miss Tsang for the Petitioner in reply submitted the Respondent had all along been paying the mortgage instalments.  The Respondent is a medical doctor by occupation and the Petitioner was unemployed with no income.  The interim maintenance to the Petitioner by that time was only HK$15,000 which had not taken into account of the Petitioner having to shoulder any part of the monthly mortgage payments. 

59.  In my decision, the Respondent’s contention do not stand for the February Summons.  This is not the ancillary relief trial when one party is free to put forward figures or payments to set off claims by the other party.  I have already set out in paragraph 41 of this Decision the central issue to be determined by this Court under the February Summons.  Had the Petitioner received the alleged extra benefit (which I made no such finding) which she should not have been entitled to, this is not a matter for me to consider under the terms of the February Summons.  There was no cross application either by way of Summons from the Respondent.  Therefore, I find this contention fails.

Liberty to apply

60.  It was contended by Counsel Mr. Chow at paragraphs 22 and 23 of his written submissions that the written note/comment by the learned Deputy Judge Tracy Chan totally falls outside the ambit of the implementation of the Order dated 6 February 2009 (as amended on 2 June 2009).  Thus, the ‘liberty to apply’ clause in that Order simply do not hold water.  Moreover, relying upon the case of Leung Yee & Anor v. Ng Yiu Ming & Anor [2001] 1 HKLRD 309 (CA), the ‘liberty to apply’ clause is not unqualified or unlimited.  

61.  The relevant clause in the 6 February 2009 Order reads as follows :-

“There be liberty to apply in relation to the implementation of the terms herein.”

62.  The ‘liberty to apply’ clause is a right given to the parties.  The written note/comment was a reply to an enquiry by the Petitioner’s Solicitors.  The issue should have been raised, in my view, would be whether the ‘liberty to apply’ clause permits the Petitioner’s Solicitors to write the letter dated 2 February 2012 (at pages 240 to 243 of the Pleadings Bundle) to the learned Deputy Judge Tracy Chan for clarification.  The Respondent’s Solicitors also wrote on 4 February 2012 (at pages 244 to 245 of the Pleadings Bundle) invited the learned Deputy Judge not to give clarification.

63.  In the contents of the Petitioner’s Solicitors’ letter, there was no reference to the basis for seeking clarification nor stating reliance was made under the ‘liberty to apply’ clause.  However, having considered the letters from both parties, the learned Deputy Judge Tracy Chan decided to give her clarification on the matter.  Thus any issue on the ‘liberty to apply’ clause would then become academic.

Functus Officio

64.  Counsel Mr. Chow referred me to the Andayani v. Chan Oi Ling case (supra) which applied the English case of Millensted v. Grosvenor House (Park Lane) Ltd (supra).   Miss Tsang relied upon the Hong Kong Court of Final Appeal decision in the case of Man Ping Nam & Anor v. Man Fong Hang, FACV No.5 of 2006.

65.  Quoting two important passages from the Man Ping Nam case :

“10. Even if an Order as drawn up is ambiguous, it is well settled that the court (at all levels) has an inherent or implied discretionary power to clarify the original order if the court’s intention appearing from the body of the judgment is manifest. As Lord Penzance stated in Lawrie v. Lees (1881) 7 App Cases 19 at 34-35 :

‘I cannot doubt that under the original powers of the Court, quite independent of any order that is made under the Judicature Act, every Court has the power to vary its own orders which are drawn up mechanically in the registry or in the office of the Court – to vary them in such a way as to carry out its own meaning, and where language has been used which is doubtful, to make it plain. I think that power is inherent in every Court.’

See also the cases cited in Hong Kong Civil Procedure 2007 at 20/11/1.

11. In the absence of any prejudice to the other party (in which event discretionary considerations may come into play), it matters not that an application for such clarification is made after the Court’s order has been sealed since it operates to make plain what the Court has in fact already decided. It does not involve the Court acting when functus officio.”

66.  In my decision, I believe the learned Deputy Judge Tracy Chan was acting within the perimeters of the principles under the Man Ping Nam case when giving her clarification.  Thus, there is no question of her acting when functus officio.

Other matters

67.  In deciding on the February Summons, I have not given any consideration to the clarification by the learned Deputy Judge Tracy Chan.  Such clarification is not binding upon me or bears any persuasive effect.  In my view, I am entitled to and have considered all the circumstances and issues raised by the parties at this hearing in arriving at my decision. 

68.  For my reasons above, I find in favour of the Petitioner. 

Conclusion

69.  I grant an Order in terms of the February Summons to the extent that the Respondent shall pay to the Petitioner the sum of $647,125 (subject to deducting any sums already paid) to discharge his obligations under the terms of the Macau shares transfer Order.  

70.  Since my findings are that the Macau shares transfer Order does require clarification and such clarification was only obtained on 16 February 2012, I do not agree that the Respondent should pay interest on the sum which I now found to be paid by him to run from 4 July 2009.  Even if no clarification was needed, the stay of execution order had also deferred whatever payment required of the Respondent until the outcome of the Appeal in 2010.

71.  The clarification by the learned Deputy Judge Tracy Chan on 16 February 2012 by itself is not an Order for payment or can it be taken as a supplemental Order to the Macau shares transfer Order.  On all fairness, I will order the Respondent only to pay interest at Judgment rate if the sum of HK$647,125 (subject to deducting any sums paid) is not paid to the Petitioner within 14 days of this Decision.

72.  On the issue of costs of the February Summons, I see no reason why the normal rule should not apply.  I will therefore order the Respondent to pay the costs of the February Summons.

73.  On the issue of costs of the December Summons which was reserved, I make no order as to costs. The Petitioner now succeeded without the need to obtain the statements required of under the December Summons.  This Court does not have to consider those statements either when deciding the February Summons.  With respect to Miss Tsang, I do not agree the request for those statements under the December Summons which had been withdrawn was part and parcel of the Petitioner’s case under the February Summons. 

Order

74.  My Orders will be as follows :-

(a)  The Respondent do pay to the Petitioner the sum of HK$647,125 (subject to deducting any sums which had been paid within 14 days of this Decision ;

(b)  In default of payment under paragraph (a), there will be interest thereon at Judgment rate until date of full payment;

(c)  The Respondent do pay the costs of the Petitioner’s Summons dated 20 February 2012, to be taxed if not agreed;

(d)  There be no Order as to costs of the Petitioner’s Summons dated 1 December 2011.

75.  The costs order nisi will become absolute unless any of the parties apply to vary the same within 14 days.