TMLA v. WHW

FCMC 1096 / 2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 1096 OF 2014

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J U D G M E N T
(Ancillary Reliefs)

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Introduction

1. The Petitioner is the Wife (“Wife”) and the Respondent is the Husband (“Husband”).

2. On the first day of trial, parties through their respective lawyers were able to compromise on the child’s monthly maintenance.  The Husband agreed to pay to the Wife periodical payments for the child of the family, a girl presently aged 7, at the rate of HK$13,000 a month on or before 3 October 2015 and thereafter on or before the 3^rd day of each and every succeeding month until maximum term or further order.

3. The Minute of Consent Order was signed on the second day of trial which superseded and discharged the interim maintenance order dated 8 October 2012 made under the previous divorce proceedings of FCMC No.10298 of 2012.  The Minute of Consent Order was approved by the Court and the Consent Order was granted accordingly.

4. Thus, the remaining issue to be tried is the parties’ respective ancillary reliefs against each other. 

Background

5. The parties were married in October 2004 in Hong Kong.  There is one child born out of the marriage, a girl, who is at the age of 7 at the commencement of this trial.  Divorce proceedings were first commenced by the Wife relying upon ‘Unreasonable Behaviour” under FCMC No.10298 of 2012. 

6. On 16 August 2013, the learned Deputy Judge KK Pang, after a 4-day trial in FCMC No.10298 of 2012, granted a joint custody order of the daughter with care and control to the Petitioner and defined access to the Respondent. 

7. On 27 January 2014 these proceedings were commenced relying on the fact of “Consent One Year” in substitution for the earlier proceedings under FCMC No.10298 of 2012.

8. Decree Nisi was granted on 30 October 2014 in these proceedings whereupon the Petition under FCMC No.10298 of 2012 was dismissed save and except the said custody and access order dated 16 August 2013 stands.

9. The Husband was aged 46. He works as Business Coordination Manager with a leading bank in Hong Kong.  The Wife was aged 42.  She works as a Legal & Compliance Manageress in the private sector.  

The Agreed Facts

10. There is only one property in question, namely, the matrimonial home (“MH”) situated at Tseung Kwan O, New Territories, Hong Kong of which the parties accepted the valuation by the single joint expert CS Surveyors Limited to be 7 million.  This MH is a 2-bedroom unit purchased in November 2004 under the sole name of the Husband at 2.66 million and mortgaged to DBS Bank (Hong Kong) Limited.  In December 2007, the Husband redeemed the mortgage and the Charge was discharged on 14 December 2007.  As Assignment was then executed by the Husband and the Wife on 19 December 2007 (that is, 5 days after the Discharge) as Joint Tenants at a consideration of 3.6 million holding the MH.  The Husband has in law and by conduct assigned and transferred half of his interests in the MH to the Wife.  A Notice of Severance dated 26 March 2013 was registered with the Land Registry against the MH by virtue of which the joint ownership was severed to a co-ownership as tenants in common in equal shares. 

11. The Husband paid for the purchase and subsequent redemption of the MH.  The Wife agreed that about 74% of the moneys for the purchase and redemption of the MH came from the Husband’s pre-marital assets.  

12. In July 2012, the Wife left the MH bringing along with her the daughter and since then lived with her maiden family in a property in Wanchai, Hong Kong (“Wanchai Property”).  The MH was then occupied by the Husband alone until now.

The Issues Involved

13. There is not much dispute between the parties over the Summaries of Assets and Liabilities at Part 2 of their respective latest Form Es, Wife’s at A:151 and Husband’s at A:172 save and exceptthe issues set forth below and some updating as to figures.

14. The issues are summarised as follows :-

(a)  Whether the Wife was in possession of 300 Taiwanese commemorative 100 dollar bank notes (value agreed by the parties at HK$154,800) which should be accounted for by the Wife ?

(b)  Parties’ increased monthly contributions made to their respective parents after their separation in July 2012;

(c)  The Wife’s alleged indebtedness to her mother at HK$200,750 and to her brother at HK$200,000;

(d)  The Wife’s alleged indebtedness to her mother of HK$14,360 being money contributed to a holiday trip of herself and the daughter which remain outstanding and unpaid;

(e)  The Wife’s alleged reasons for the diminution in value of her valuable items from HK$150,000 in her 1^st Form E (A:23) down to HK$50,000 in the 3^rd Form E (A:147).

(f)  Whether the Husband’s withdrawals of GBP 5,000 and USD 5,000 be ‘added back’ as part of his assets ? and

(g)  Parties’ respective MPFs/ORSOs.

15. During the Husband’s evidence in chief on the 2^nd day of trial, he agreed to ‘add back’ a total sum of HK$400,000 (being HK$100,000, HK$100,000, HK$100,000, HK$50,000 and HK$50,000) which he transferred out between July and September 2012 from his HSBC bank account to his parents as gifts (A:200) into the pool of family assets.

The Husband’s Open Proposals

16. The Husband made it open that he wished to continue staying in the MH and would like to purchase the Wife’s share in the MH.  Given the undisputed fact that around 74% of the moneys for purchase of the MH came from his pre-marital assets, he proposed a 5% departure from equal sharing to his favour in respect of his interests in the MH that is to say, he has 55% share and the Wife gets the remainder of 45% share. 

17. As to the other undisputed assets of the parties, and also those ‘add back’ sought by him against the Wife under the issues to be resolved, the Husband’s stance was that they should also be shared by the same ratio of 55% to him and 45% to the Wife.

The Wife’s Open Proposals

18. The Wife in her Affidavit dated 4 June 2015 (A:192 - 201) at paragraph 20 (a) proposed the MH be sold at market price within 3 months from the date of the court order and net proceeds thereof be equally shared between the parties.  All the other assets of the parties also be shared equally.  That is, adopting an overall 50:50 equal sharing ratio.

The Law on Ancillary Relief

19. The jurisdiction of the Court in granting financial relief for a party is governed by section 4 of the Matrimonial Proceedings and Property Ordinance, Cap 192(“MPPO”) which provides:

“4. Financial provision for party to a marriage in cases of divorce, etc.

(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of section 25(1), make any one or more of the following orders, that is to say-

(a)   an order that either party to the marriage shall   make to the other such periodical payments and for   such term as may be specified in the order;

(b)  an order that either party to the marriage shall secure  to the other to the satisfaction of the court, such  periodical payments and for such term as may be so     specified;

(c)  an order that either party to the marriage shall pay to  the other such lump sum or sums as may be so  specified.

(2) Without prejudice to the generality of subsection (1)(c), an order under this section that a party to a marriage shall pay a lump sum to the other party-

(a) may be made for the purpose of enabling that other party to  meet any liabilities or expenses reasonably incurred by him or her in maintaining himself or herself or any child of the family before making an application for an order under this section;

(b) may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court.“

20. The governing principles in relation to the distribution of the family assets in dissolution of marriage are set out in section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192, (“section 7 factors”) which states as follows:

(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.

21. In the leading case of LKW v DD[1] the Court of Final Appeal sets out 4 principles as to how section 7 shall be approached, which are stated as follows:

a.   The first is that the implicit objective of a section 7 exercise is to arrive at a distribution of assets which is fair as between the parties[2];

b.   The second is that the concept of fairness requires the refutation of any gender or role discrimination[3];

c.   The third principle is that, with a view to eliminating insidious discrimination and promoting fairness, judges should check their tentative views on distribution against a “yardstick of equal division” which should be departed from only for good, articulated reasons[4];

d.  The fourth principle is that the court should not countenance any attempt to engage in costly and often futile retrospective investigations of the failed marriage which tend to deplete the parties’ (and the courts’) resources and to increase antagonism and discourage settlement[5]. 

22. The Court of Final Appeal went further to lay down 5 steps as to how the Court should do when exercising section 7 as follows:

a.   The first step in the exercise is to ascertain the financial resources of each of the parties calculated as at the date of the hearing[6];

b.   The next step is for the court to assess the parties’ financial needs[7];

c.   If surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the court to apply the sharing principle to the parties’ total assets, leaving the “needs” question previously considered to be dealt with under that principle[8];

d.  The fourth step therefore involves considering whether good reasons exist for departing from the principle of equal division[9];

e.   When deciding the outcome, the court is not bound to depart from equality in the division of the parties’ assets even if one or more of the factors considered are engaged on the facts.  The weight to be given to such considerations is a matter of discretion for the court[10]

The Court’s View on the Issues in dispute

Issue (a) – The 300 Taiwanese commemorative 100 dollar bank notes

23. The Husband raised such issue at paragraph 2.10 of his Form E dated 2 November 2012 (A:48) filed in the earlier divorce proceedings where he asserted that the bank notes were stored at the Wife’s address in the Wanchai Property.  The Husband at the same paragraph 2.10 of his other 2 Form Es filed later in the present proceedings, respectively dated 7 June 2014 (A:88) and 2 September 2015 (A:170) no longer, for reasons unknown, made any assertion as to the whereabouts of the bank notes.  Since the Husband was represented by the same firm of lawyers throughout in the earlier divorce proceedings and the present proceedings who prepared all the 3 Form Es, it is fair to say that there should be reasons, rather than any omission of the lawyers in the drafting, for the Husband not to continue with his earlier assertion as to the whereabouts of the bank notes in the 2^nd and 3^rd Form Es.   

24. What then happened was that the Husband in his 4^th Affidavit dated 10 March 2015 filed in these proceedings (A:187) at paragraphs 17(c) and 18, started to assert the bank notes were in the Wife’s possession and no longer re-visiting his earlier assertion that the bank notes were stored at the Wanchai Property. 

25. Since it is the Husband’s own case and evidence that he himself directly dealt with the Wife’s 3^rd elder brother throughout (not with the Wife) on the purchase of the 300 Taiwanese commemorative 100 dollar bank notes for resale for profits, I fail to see how the Husband could establish a positive case against the Wife personally in possession of the bank notes without bringing in the evidence of the 3^rd elder brother whom he actually dealt with.  In my view, there is a sharp difference between the first assertion of the bank notes were stored at a place where the Wife and her parents reside and the later assertion that the notes were in the possession of the Wife who should now account for it.  The two does not tie hand-in-hand for the Court to make any findings of fact or to draw any reasonable inference that the Wife is in possession of the bank notes and therefore she need to account for it.  According to the records, there has never been any attempt by the Husband to bring in the evidence of the 3^rd elder brother on this issue.  I find the Husband fails in seeking the Wife to account for the value of the bank notes.

26. Given that it is the Husband’s own case that the 300 Taiwanese commemorative 100 dollar bank notes at are his assets, I am entitled to and will add the agreed value of HK$154,800 as part of the Husband’s assets.   

Issue (b) – Parties’ increased monthly contributions to their respective parents

27. As rightly stated by Husband’s Counsel Mr. Enzo Chow in his Closing Submissions, such issue of contribution to parents cuts both ways.  On the undisputed evidence, both parties have increased their monthly contributions to their respective parents in July/August 2012 when they separated from each other although the reasons behind such increase are in issue.   

28. The parties agreed the date of separation is 17 July 2012 and it was the Wife who moved out from the MH together with the daughter.  The Wife’s case was that the moving out from MH was triggered by the physical abuse over the daughter by the Husband.  The Husband’s case was that it was simply the Wife’s premeditated plan to leave the MH.

29. The Wife’s explanation for increasing the monthly payments to her maiden family after her separation from HK$5,000 to HK$20,000 is to cover the living and meal expenses of herself and the child of the family.  She was cross examined upon one of her answers provided under (ff) (A:74) that a sum of HK$20,000 paid to her parents on 9 July 2012 was said to be contribution to living and meal expenses for herself and the daughter after they moved to her maiden family.  This was, however, in direct conflict with the undisputed fact that the separation only took place few days later on 17 July 2012.  The Wife then explained that the sum made on 9 July 2012 was to repay her parents for buying furniture for the impending moving in.  

30. Upon cross examination, the Husband’s explanation for increasing his monthly payments between HK$6,000 and HK$10,000 to HK$15,000 commencing August 2012, which is the month following the parties’ separation was that because the Wife had taken away the child from his parents.  There was once an occasion when his elderly father (aged 76) and elderly mother (aged 74) had to stand on the street to wait for the Wife.  The Husband then said he felt regret to his parents (我對唔住佢地!) and, psychologically and emotionally speaking, he wanted to compensate them.  He simply felt sorry to his parents.  He further added that he had to increase the payments but accepting that there were no financial needs of his parents for him to do so.  Upon re-examination, the Husband then gave an explanation that the increased payments were to cater for any additional expenses incurred by his parents when taking care of the child.

31. The Husband sought for the period from separation (July 2012) to trial (September 2015) for 38 months at HK$20,000 a month totalling HK$760,000 ($20,000 x 38) to be ‘added back’ to the pool of family assets.  The Husband is, however, agreeable to a lesser amount if the Court is minded to take into account some rental element for the child’s accommodation costs.  On the other hand, the Wife contended that for the period since separation up to trial of 37 months totalling HK$259,000 should be ‘added back’ as the Husband’s assets.  This figure of HK$259,000 was arrived at by adopting a base figure of HK$7,000 a month for 37 months.  Such base figure was the difference between the Husband’s increased amount of HK$15,000 and HK$8,000, being the average of HK$6,000 to HK$10,000 (that is, HK$6,000 + HK$10,000 x ½ = HK$8,000) which the Husband was paying his parents prior to separation.   

32. Both parties have been working after their separation in July 2012.  Although both parties are criticising the other’s motive behind the increase of payments, neither of them have adduced any evidence that but for those regular contributions the pool of family assets would be enlarged or that the payments made to their parents actually came out from the pool of family assets rather than their personal monthly salaries.  Moreover, there is no evidence that but for the increase, that portion of the increase would be saved up and accumulated by the parties and fall into the pool of family assets for distribution.  In any event, the respective increases only happened post separation and, unless there is evidence that the portion as to increases and also the original amount they were paying came out from the pool of family assets, such sums of payment would not involve any contribution of the other spouse.

33. For these reasons, I decided that both parties are not entitled to seek any ‘add back’ into the pool of family assets of any amount allegedly paid by each of them to his/her parents since separation.  

Issue (c) – The Wife’s Indebtedness to her mother and brother

34. The Wife had not arranged her mother and brother to testify in Court.  Since her case was that the amounts borrowed on loan were largely for the purposes of legal costs, she produced bank deposit slips, cheque copies and a home-made loan receipt with her brother for HK$50,000 as supporting evidence (B:582-587).

35. The Husband’s contention rests with the probability of the Wife having to raise loans from her mother whilst she allegedly was and is contributing HK$20,000 a month to her parents for, say, 38 months since their separation back in July 2012 up to this trial, totalling about HK$760,000.   

36. I agree with the Husband that the Wife’s alleged loans from her mother and brother are dubious.  In the absence of direct evidence from the creditors (namely, the Wife’s mother and brother), this Court cannot simply accept the documents produced at their face values as to the existence of such loans of which still remain outstanding and unpaid.  In any event, it is for the Wife to prove her alleged indebtedness by direct and cogent evidence. 

37. Accordingly, I make no finding that the Wife had outstanding loans to her mother at HK$200,000 and to her brother at HK$200,750 as she so alleged in her Form Es.  These sums would not be counted as the Wife’s liability in the computation exercise.

Issue (d) The Wife’s Indebtedness to her mother of HK$14,360

38. The Wife also had not been able to produce direct evidence from her mother on such issue.  I agree with the Husband that, on balance of probabilities, it is dubious that such alleged ‘long-standing’ debt had ever or still existed and needed to be repaid.  If it has to be repaid, why there was no off-setting or deduction from any one of those regular monthly contributions she made so far in the past 38 months ?  This looks illogical and dubious.  The only reasonable inference is that such liability, even if it does exist, might not have to be repaid.  

39. Accordingly, there is no finding of such liability on the Wife in the computation exercise.

Issue (e)   The diminution in value of the Wife’s valuable items

40. It was noted by the Husband that for the same item of valuables at paragraphs 2.10 of the Wife’s 3 Form Es dated 4 October 2012 (A:23), dated 30 June 2014 (A:108) and 29 August 2015 (A:147), the values stated therein had dropped from HK$150,000 to HK$100,000, and then further down to HK$50,000.

41. The Wife’s explanation was that the figure of HK$100,000 in the 2^nd Form E was a typo, it should be the same as in the 1^st Form E of HK$150,000.  She lately discovered a Rolex brand watch was lost probably taken away by her domestic helper who had finished the contract of employment which accounted for the value in the latest Form E to drop to HK$50,000. 

42. Same as in the case of her Indebtedness aforesaid, the Wife has to produce evidence rather than bare assertion as to the diminution in values; especially the reasons given could in most cases be substantiated by documentary evidence, say, such as police report.  Further, the extent of diminution from HK$150,000 to HK$50,000, which is 1/3 of the original stated amount, is significant. 

43. In the absence of cogent evidence, my decision is to adopt the original amount of HK$150,000 in the computation of the Wife’s assets.

(f)   Husband’s withdrawals of GBP 5,000 and USD 5,000

44. The Husband had withdrawn GBP 5,000 on 10 August 2012 (B:303) and USD 5,000 on 23 July 2012 (B: 301).  Both withdrawals fall within a month of the agreed date of separation of 17 July 2012. 

45. The Husband’s explanation as to the GBP 5,000 withdrawal was that he used it to repay his parents the education fund provided to him.  However, the Husband had graduated for about 20 years.  It is hard to believe that the Husband has to repay his parents in August 2012, some 20 years after his graduation.  I find the Husband’s explanation not credible. 

46. Accordingly, this sum of GBP 5,000 would be added back to the Husband’s assets.  I will adopt an exchange rate of GBP 1 to HK$11.80 for such sum, that is to say, HK$59,000 will be added back.

47. As to the withdrawal of USD 5,000, the Husband could not recall the reasons.  I find such sum should also be added back to the Husband’s assets.  The exchange rate to be used is USD 1 to HK$7.80, that is to say, HK$39,000 will be added back.

(g) Parties MPFs/Pensions

48. There is no dispute that parties’ MPFs/ORSOs should be included in the pool of family assets. 

49. However, the Husband in his evidence in chief disagreed with using the amount of HK$619,621.32 (A:172) for the reason that his ORSO values as at 30 June 2012 was only HK$321,595.42 (B:331).  This is the closest date to the separation date.  He fairly agreed to also add upon it the accrued benefits in his earlier years of work under his preserved account in the sum of HK$27,525.26 (A:50).  He disagreed to add any of his ORSO accrued benefits post separation in the computation.   

50. I agree with the Husband’s submission which is fair and reasonable.  The Wife would have no contribution to the post separation accrued ORSOs benefits.  Thus the amount of the Husband’s ORSO benefits to be included in the pool of family assets would be HK$349,120.68 (that is, HK$321,595.42 + HK$27,525.26).

51. On principles of fairness and equality, the Wife’s MPF accrued benefits would be HK$186,584.20 (A:25) stated in her 1^st Form E dated 4 October 2012.  Any post separation accrued benefits would also be excluded from the pool of family assets.

Identification of Assets

52. Given the findings on the above issues in dispute and those undisputed assets disclosed by the parties in their latest Form E, including the ‘add back’ of HK$400,000 agreed by the Husband (see paragraph 16 above), the adjudged ‘add back’ of HK$59,000 (see paragraph 46 above) and the HK$39,000 (see paragraph 47 above), the Husband’s and Wife’s assets position (except the MH) are as follows :-

Nature of Assets			Wife's Assets	Husband's Assets
1.	Cash at Bank (Form E – para 2.3)		HK$ 16,538.44	HK$643,050.53 (HK$ 265,050.53 Form E- para 2.3) Less HK$120,000 (legal costs) Add HK$400,000 (paragraph 15) Add HK$59,000 (paragraph 46) Add HK$39, 000 (paragraph 47)
2.	Stocks and Shares   (Form E – para 2.7)		HK$299,237.00	HK$ 571,120.00
3.	Insurance Values   (Form E – para 2.8)		HK$ 51,807.64	Nil
4.	Valuable Items  (Form E – para 2.10)		HK$150,000.00   (paragraph 43)	HK$ 154,800.00   (paragraph 26)
5.	MPFs/ORSOs  (Form E – para 2.12)		HK$186,584.20   (paragraph 51)	HK$ 349,120.68    (paragraph 50)
	Sub-total :		HK$704,167.28	HK$1,718,091.21
Less Liabilities :
6.		Credit Card (Form E – para 2.13)	HK$  119.00  (paragraphs 37 and 39)	HK$  5,186.80
Net Assets of Parties :   (Excluding MH)			HK$704,048.28 (say, HK$700,000.00)	HK$1,712,904.41 (say, HK$1,710,000.00)
Sub-total of the Family Assets :   (Excluding MH)			HK$2,416,952.69  (i.e. HK$704,048.28 + HK$1,712,904.41)   (say, HK$2,410,000.00)

53. Adding to the above sub-total of family assets of HK$2,410,000 plus the agreed value of the MH of HK$7,000,000, the total value of the pool of family assets becomes HK$9,410,000.00 (i.e. HK$7,000,000.00 + HK$2,410,000.00).

Assessing the parties’ financial needs

54. The next step is for the Court to assess the parties’ financial needs.  There is no question that both parties have enough earning capacity to cater for their own daily needs and also both parties looked forward to a clean break arrangement.  The only contention is whether there should be any departure from equal division.

Income, earning capacity, property and other financial resources

55. The Husband is aged 46 and working as a Business Coordination Manager with a leading bank in Hong Kong. His reported monthly income was HK$58,800 plus bonus averaged at HK$8,375. Thus the average total monthly income was HK$67,175.  No doubt he has an above average degree of earning capacity.  There is no reported physical or mental disability which may affect his earning capacity in the foreseeable future.

56. The Wife is aged 42 and working as a Legal & Compliance Manageress with a management company.  Her reported monthly income was HK$37,000 and she was pursuing a Masters Degree at Law (LL.M) due to finish in 2016.  Same as the Husband, her earning capacity is also above average.  There is also no reported physical or mental disability which may affect her earning capacity in the foreseeable future.  Over the years the Wife had been changing different jobs which further shows that her earning capacity is above average.

Financial needs, obligations and responsibilities etc

57. Both parties are capable of looking after their own financial needs from their earned income.  The child’s financial needs have been secured by the Minute of Consent Order reached between the parties at the beginning of the trial.  The Wife who was granted the custody, care and control of the trial has had her parents and domestic helper assisting her to look after the child.  There is also no reported physical or mental disability over the child that calls for any additional obligations or responsibilities from the Husband or the Wife.

Standard of living before breakdown of marriage

58. Both parties deposed in their respective Form Es that they have yearly trips once or twice to places outside Hong Kong.  The parties used to live in a private residential flat about 678 sq ft in Tseung Kwan O with clubhouse facilities.  There was and is the service of a foreign domestic helper.  The standard of living is moderately good and above average.

Age of each party and duration of marriage

59. At present, the Husband is aged 46.  The Wife is aged 42.  As at the date of the Decree Nisi on 30 October 2014, the marriage had lasted for 10 years. 

Physical or Mental disability of either of the parties

60. Both parties are reported to be physically and mentally sound in their latest Form Es.

Contribution made by each parties to the welfare of the family

61. Admittedly the monetary contribution to the purchase of the MH and daily household maintenance and expenses solely came from the Husband.  At trial, the Husband through his Counsel confirmed that no reliance would be placed on any special contribution.

Applying the sharing principle

62. Provided that the pool of family assets are sufficient to cater for the parties’ needs and there remain surplus for distribution, the Court will generally apply the sharing principle to the total assets identified unless there are good reasons for departing from the principle of equal division (see LKW v. DD, supra). 

63. In my decision, the principle of equal division will be applied in this case subject to any good reasons for departure. 

Consideration of any good reasons for departing from equal division

64. Given full consideration to the facts of this case and the overall circumstances, I decided that there should be no departure from equal division. 

65. Although 74% of the Husband’s pre-marital assets were spent on the acquisition and redemption of the MH, the fact that 5 days after redemption of the MH, the Husband decided to transfer half of his legal and beneficial interests in the MH to the Wife by way of an Assignment.  This is, by presumption of advancement in equity, an outright gift to the Wife in respect of which the factor of pre-marital assets would have to give way to.  It is unfair to the Wife and incorrect for the Husband, when he was faced with the Wife’s ancillary reliefs claim upon divorce, to be able to go through the back door for avoiding the presumed gift by arguing the source of funds for acquisition of the MH came from his pre-marital assets.  

66. Moreover, the explanation provided by the Husband that it was the Wife who at that time told him that she wanted to have more ‘safety’ (安全感) then he made the transfer of half interests is, in my decision that even if that was the case, insufficient to support any finding of contrary intention to rebut the equitable presumption of advancement, namely an outright gift to the Wife of half of his interests in the MH.  Causing a Notice of Severance dated 26 March 2013 to be registered at the Land Registry could not be accepted as any contrary intention either since this was done after the commencement of the first divorce proceedings of FCMC10298 of 2012.

67. There are no other compelling or convincing reasons for me to consider any departure from equal division.

Deciding the Outcome

68. Applying the 50:50 equal split of the total amount of family assets of HK$9,410,000 (see paragraph 53 above) found by this Court, each party would be receiving HK$4,705,000 (HK$9,410,000 x ½ = HK$4,705,000).

69. Since the Wife was found to be in possession of HK$700,000 and the Husband in possession of HK$1,710,000 (see paragraph 52 above), the net result after equalisation of the total family assets (including the MH) would be for the Husband to pay to the Wife HK$4,005,000 to buy out the Wife’s interests in the MH and all her other financial reliefs so that he would have 100% interests in the MH. 

Costs

70. Taking into account the outcome of this case and the parties’ respective Open Proposals, I find the Wife successfully beats the 50/50 ratio split found by the Court.  It is fair and reasonable that the normal rule as to costs should apply.  I order the Husband to pay the costs of the Wife’s ancillary reliefs, including all costs reserved, to be taxed if not agreed on party and party basis.

71. I also grant Certificate for Counsel.

Orders

72. I now make the following Orders on ancillary reliefs :

(1)The Husband (Respondent) do pay to the Wife (Petitioner) a lump sum of HK$4,005,000 within 30 days of the date of the Decree Nisi being made absolute;

(2)Upon full payment of the lump sum of HK$4,005,000 under paragraph (1) above :-

(a)  all the Wife’s (Petitioner’s) rights and interests in the

MH and both parties’ ancillary reliefs be wholly extinguished and stand dismissed;

(b)the Wife (Petitioner) do forthwith transfer and assign all her legal and beneficial interest in the MH to the Husband (Respondent); and

(c)  all costs, expenses, stamp duty and related expenses for the transfer under paragraph (b) above be equally shared between both parties.

(3)The Wife (Petitioner) do within 7 days from the date of this Judgment apply for the Decree Nisi dated 30 October 2014 to be made absolute;

(4)The Husband (Respondent) do pay the Wife’s (Petitioner’s) costs of the ancillary reliefs, including all costs reserved, to be taxed if not agreed;

(5)There be Certificate for Counsel;

(6)There be liberty to apply for directions on implementation of this Order.

73. This costs order nisi will become absolute unless any party apply to vary the same within 14 days from the date of this Judgment.

Section 18 declaration

74. I also grant a declaration under Section 18(1)(b)(i) of the Matrimonial Proceedings and Property Ordinance, Cap.192.

75. Last but not least, I wish to express my gratitude to Counsels and both parties’ legal representatives for their valuable assistance to the Court.