IDC v. SSA

FCMP 158 / 2011

[2018] HKFC 91

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MISCELLANEOUS PROCEEDINGS NO. 158 of 2011

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D E C I S I O N

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Foreword

1.  These proceedings were brought by the Applicant (Mother) under the Guardianship of Minors Ordinance, Cap.13 (“GMO”) against the Respondent (Father) for financial reliefs in respect of their child born in March 2009, who is now at the age of 9.

2.  On 22 January 2013, His Honour Judge Bruno Chan after trial ordered that the Father do pay a periodical sum of $118,000 a month to the Mother for the financial support of the child.    I will describe this as the “2013 Order”.

3.  In addition, within the terms of the 2013 Order, there are a number of undertakings from the Father to pay for the child’s other expenses such as school fees, school bus charges, fees for ballet and music classes, medical insurance, reasonable costs of extra curricular activities such as piano, arts and crafts, Mandarin lessons.   

4.  Moreover, the Father also undertook to pay for holiday provisions including 2 economy class round trip tickets per year, HK$600 per day as daily expenses on holidays up to 2 weeks per trip.   The Father further undertook to be directly responsible and continue to pay the child’s local travel, food, clothing, toys and presents, as well as the salary of the domestic helper, directly to the Mother.   That is not the end of it, the Father further even undertook to pay for the annual passes for Ocean Park and Disneyland for the child and the Mother.

5.  On 26 April 2018, the Mother applied (by way of Inter Partes Summons) (“the Variation Summons”) for variation of the 2013 Order not for any upward adjustment of the periodical sum of $118,000, but seeking an overhaul variation to the extent that there be lump sum order; secured lump sum order; settlement of property order; transfer/sale of property order in respect of 6 units all located in the Convention Plaza, Wanchai, Hong Kong, with each of the addresses individually set out, and also for variation of settlement order.    Though the Mother caused the Variation Summons to be registered against the title of the landed properties, the Lands Registry only classified the Variation Summons under “Deeds Pending Registration” column rather than as an encumbrance.   The Variation Summons was scheduled for hearing on 18 May 2018 before Judge CK Chan (that is, in 7 days’ time) as the first call over hearing.   Undisputedly, all the landed properties against which registration was sought are legally owned by corporations in respect of which the Father has beneficial interests.

6.  Yesterday around 4:30 p.m., this Court received from the Father’s lawyers Tanner De Witt (“TDW”) a letter requesting an urgent hearing be arranged to deal with the Father’s application for vacating registration of the Variation Summons under s.19 of the Lands Registration Ordinance, Cap.128, in respect of 2 out of the 6 landed properties named in the Variation Summons.   Apparently he was unable to secure the Mother’s agreement through parties’ lawyers exchange of correspondence to vacate those “lis” pending registration.   In TDW’s letter, it was said that completion of sale of the 2 units was scheduled for today but without stating at what time today.   The amount at stake of the 2 transactions are valued was said to be in the order of HK$78 million.

7.  At around 9:00 a.m. today, an urgent appointment was arranged by this Court for the Father’s application to be heard at 9:30 a.m.   TDW’s letter of yesterday informed this Court that they had given notice of their intended ex parte application to the

Mother’s lawyers Messrs. Oldham, Li & Nie (“OLN”) and would inform them of any hearing scheduled by this Court.

8.  Around 10:06 a.m. today, the hearing started where Counsel Mr. Edward Alder appeared for the Father.    Upon instructions, Mr. Alder confirmed to this Court that OLN had been duly informed by his instructing solicitors Mr. Mark Side about this urgent hearing.   Nonetheless, nobody turned up for the Mother and the hearing proceeded.   This Court directed an affirmation of service as to notice of this hearing having been given to OLN to be filed by TDW by 4:00 p.m. today. 

9.  There was before the Court the Father’s Ex Parte Summons and his supporting Affirmation dated 10 May 2018 and filed today.   There are also paginated bundles incorporating, amongst others, those letters exchanged between TDW and OLN prior to this application (at pages 333 to 339 of Bundle B).    There was also a written skeleton argument of Mr. Alder dated 10 May 2018 before this Court with a brief submission in reply to the case of Sun Ngai International Investment Limited v. Zhang Su Hua [2008] HKCFI 591, [2009] 1 HKLRD 48, the case which OLN relied upon and refused to accede to the Father’s request for vacating those “lis”.    During the hearing which started around 10:06 a.m. and it was only upon my enquiry, this Court was informed for the first time that the time for completion was scheduled for 11:00 a.m. today, which is just less than in an hour (my emphasis).

10.  At the end of the hearing, this Court granted the Father’s application on terms; leaving behind the reasons for decision to be now given. 

The parties’ respective positions

11.  Counsel Mr. Alder had not produced any cases or authorities.  Though OLN for the Mother had not appeared at this hearing, I have had the benefit of reading the letters exchanged where the Mother’s stance could be readily seen. 

12.  The Mother relied upon the case of Sun Ngai International Investment Limited v. Zhang Su Hua [2009] 1 HKLRD 48, which is a decision of the High Court by Deputy Judge Carlson to support her stance that she was entitled to register the Variation Summons pending its determination.

13.  Towards the end of Mr. Alder’s skeleton submissions and also confirmed by Counsel this morning, the Father offered to pay out from the net proceeds of sales to OLN any balance of payment due for May 2018 and also advance payments for the next 3 months (June, July and August) and for OLN to immediate release to the Mother.

The Court’s Views

14.  First of all, I am satisfied that this is an application of utmost urgency properly brought before me as the Duty Judge.   Secondly, TDW’s letter of yesterday confirmed that the present hearing so requested is an ex parte on notice application and that they would inform OLN of any hearing arranged by this Court.   Thirdly, I was re-assured by Counsel Mr. Alder this morning that on his instructions from TDW, OLN had been duly informed of this hearing. 

15.  I have had the benefit of hearing submissions from Counsel Mr. Alder and reading all the relevant papers before me, including the 19^th Affidavit of the Mother filed

in support of the Variation Summons.   I have also considered the case of Sun Ngai International Investment Limited v. Zhang Su Hua (supra) which on all fours deals with registration of “lis pendens” against title of landed properties owned by corporation where an individual spouse has a beneficial interest.   I have reminded myself that the Sun Ngai case is binding upon me.

16.  However, given careful consideration, I decided that the Sun Ngai case is distinguishable on facts from the present application.

17.  Firstly, the Sun Ngai case related to a pending FCMCcase where ancillary reliefs of the spouse had not been determined by the Court nor concluded at any stage.   In such a scenario, the spouse ought to be protected against any disposal or dissipation of landed properties which, subject to the Court’s determination at the ancillary reliefs trial, might fall within the pot of family assets for distribution or sharing.   Thus, the spouse should be entitled to secure her position through registration of the Form A/Form 25 as a “lis” notwithstanding that those landed properties are legally owned by corporations of which the other spouse had a beneficial interest.    There is a whole spectrum of factors to be considered under Section 7 of the Matrimonial Proceedings and Property Ordinance, Cap.192 for spousal ancillary reliefs.   In the present case, which is a FCMP case, the financial reliefs afforded under the GMO restricted only to the needs of the child to be balanced against the paying parent’s means and ability to pay.   Most importantly, in the present case, such needs of the child had already been fully argued and determined by the Court after a full trial back in 2013 although amendable to variation as time goes by.

18.  The instrument registered as “lis pendens” in the Sun Ngai case, namely, a Notice of Application for Ancillary Relief (which I believe to be either in Form A or Form 25 issued in the FCMC proceedings) was found by the learned Deputy Judge to be

an instrument falling within the definition in s.1A of the Land Registration Ordinance, Cap.128, and thus is registrable notwithstanding the property against which registration was made was under the name of the plaintiff company Sun Ngai rather than under the name of the individual spouse.   This is also the scenario in this case.   

19.  Whilst I have no intention or was being asked to find and determine whether the Variation Summons likewise caught by the definition in s.1A and thus registrable, suffice to say is that the Mother or her lawyers are astute enough to see that she would not be able to register the fruits of litigation, namely, the 2013 Order wherein there was no reference to any address of landed properties.    The Form A or Form 25 comes under the Matrimonial Causes Rules, Cap.179A is not applicable to proceedings under the GMO which the Mother could make use of.    

20.  However, by issuing the Variation Summons seeking reliefs related to landed properties, as in the present case seeking transfer or sale of property orders, the Mother would then have the chance to spell out addresses of those landed properties in the Variation Summons against which reliefs were sought.    As a matter of course, she could then have it lodged with the Land Registry hoping that she would be able to register, or at the very least, to create a “lis” to put off any potential buyers of the properties.    In the present application, the question which falls to be determined is whether it is fair to the Father, taking into account all the circumstances, to be “stopped” or “deterred” from taking any commercial decisions on his assets by the mere fact that the Mother had just filed a variation application pending to be heard ?   In my view, the answer must be in the negative.    As a matter of law, variation application does not carry the force of a “Quia timet injunction”.

21.  Having said and given the fact that the Variation Summons had yet to be determined, the success or failure of which remains uncertain whereas by maintaining it on the Land Register thus putting off potential buyers is a certainty, there is no basis for the Mother to argue against removal of such “lis” because they are needed to protect the child’s interest under the 2013 Order.    To be fair to the Mother and not to prejudice her position in her forthcoming variation application, perhaps I should stop here and not postulate any further the Mother’s contention without hearing full argument of her Variation Summons.    

22.  Furthermore, on the matters set forth in the Mother’s 19^th Affidavit, there is also no basis for this Court, if being satisfied with the Father’s application, at this stage to order all the net proceeds of sale be paid into Court when there was no evidence of dissipation of assets to defeat the 2013 Order.    Any conditions imposed for the Father to pay into court all or part of the net proceeds of sale at this stage is akin to making a secured payment order in advance (my emphasis) of determination of the Mother’s Variation Summons.    Had there been evidence of dissipation by the Father to avoid payment of the 2013 Order, the Mother upon legal advice could have taken injunctive reliefs whilst seeking variation.     In my view, those incidents of late in payment as set out in paragraph 12 of the Mother’s 19^th Affidavit could not be equated with dissipation of assets.    I also wish to say that those insubstantial periods of delay seem to me that it does not even justify taking enforcement proceedings which the Mother rightly had never done so.

23.  At paragraphs 15 and 17 of the Mother’s 19^th Affidavit, she allegedly sought for restraint orders over net proceeds of sale of a property already sold by the Father in March 2018 and other properties but so far up until today, no Summons for restraint orders or injunctive reliefs had been taken out. 

24.  As said, there is a comprehensive set of on-going undertakings by the Father for the child’s other expenses, which covers almost every other aspect of the child’s day to day financial needs, coupled with the adjudged amount of HK$118,000 a month.   There is no cross application by the Father to seek variation, discharge or  withdrawal of any of the on-going undertakings nor had the Mother stated in her 19^th Affidavit that over the years since the 2013 Order the Father had been in repetitive breaches of those undertakings.   Thus, I can hardly see that the remaining 4 units in the Convention Plaza, which are in the same complex of luxurious values, would not be sufficient to cater for the future needs of the child so much so that it warrants the entire net proceeds of sale of the 2 units in question or part thereof be paid into Court to secure the child’s interest.    With those comprehensive on-going undertakings remain in place, I believe the remaining 4 units in the Convention Plaza would be sufficient to cater for the child’s needs even if the Mother at the end of the day is successful in her Variation Summons in whatever form of reliefs.

My Decision

25.  For all the above reasons, I grant an Order in terms of the Father’s Summons dated 11 May 2018 on terms that a sum of HK$432,000 be paid to OLN, Solicitors for the Mother, being past due and 3 months’ advance payments under the 2013 Order, for immediate release to the Mother.

26.  I also decided that the costs of and occasioned by this application be reserved; to be dealt with after disposal of the Mother’s Summons dated 26 April 2018.