TAO CHEN PI O v. TAI HSIUO MING

1993, Nos. 37 & 38
(Civil)

H E A D N O T E

Rule 73(2) of the Matrimonial Causes Rules, Cap 179 - duty of a party served with notice of an application for ancillary relief to file an affidavit containing full particulars of his property and income - such affidavit must be sufficient to enable the court adjudicating upon the application properly to perform its task under section 7(1) of the Matrimonial Proceedings and Property Ordinance, Cap 192 - court will avoid microscopic investigations and costly valuations which put further strains upon the resources of the parties, heighten the emotional climate and risk indirectly harming the interests of any children - In protecting a spouse from needless applications for further disclosure the court may consider making orders as to costs under the provisions of Order 62, rule 8.

IN THE COURT OF APPEAL

1993, Nos. 37 & 38
(Civil)

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J U D G M E N T

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Kempster, V.-P.:

1. These are appeals by a wife in matrimonial (ancillary) proceedings, by leave of the judge, from the judgment of HH Judge Surman given on 20 January and orders made by him on that date and on 18 February, 1993, respectively, whereby he declined to order either further and better particulars of the husband's affirmation of means or the transfer of the cause to the High Court. The wife seeks orders to the contrary.

2. The material parts of section 7(1) of the Matrimonial Proceedings and Property Ordinance (Cap 192) read:

"It shall be the duty of the court in deciding whether to exercise its powers (to make financial provision for a party to a marriage or for the transfer and settlement of the property of such a party) ... 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 ... "

Further, rule 73(2) of the Matrimonial Causes Rules (Cap 179), applicable to this matter, provides:

"... unless the parties are agreed upon the terms of the proposed order, (the husband) shall, within 14 days after service of ... notice file an affidavit and answer to the application containing full particulars of his property and income, and if he does not do so, the court may order him to file an affidavit containing such particulars."

Rule 77(4) reads:

"Any party to an application for ancillary relief may by letter require any other party to give further information concerning any matter contained in any affidavit filed by or on behalf of that other party or any other relevant matter, or to furnish a list of relevant documents or to allow inspection of any such document, and may in default of compliance by such other party, apply to the court for directions."

3. On 19 August 1991 pursuant to rule 73(2) HH Judge Chism ordered that the husband should within six weeks "file and serve on the petitioner an affidavit of means ...". By an "affidavit of means" is to be understood an affidavit furnishing the information required by the rule. On 27 September 1991 in purported compliance with that order the husband, describing himself as a "merchant", made and filed an affirmation which reads as follows:

"...

2. From about 1975 to June 1989, I was working in Taiwan buying and selling property. I returned to Hong Kong on about 24th June 1989 and since then I have not returned to Taiwan.

3. I believe that my total capital assets are worth at least HK$104 million in total. There is now produced and shown to me and marked 'THM-2' a schedule setting out the estimated valuation of my real properties.

4. Apart from the properties, I have cash at bank and two cars, 1 Rolls Royce and 1 Benz 560 SEC worth about HK$3.3 million.

5. I have no liquidity problems and I could adequately meet any order of the Court for the Petitioner's and the Children's reasonable requirements."

The schedule deals with the ownership, approximate purchase price, date of purchase, approximate current price, estimated outstanding mortgage and estimated net value of properties in Canada, Taiwan and Hong Kong. The only Hong Kong property is that occupied by the wife in Macdonnell Road.

4. This information clearly fails to provide the minimal degree of disclosure required under an order made pursuant to rule 73(2). The figure for capital assets is expressed merely as a matter of belief, the amount of cash at the bank is not specified and the husband does not condescend to mention his income at all. While a party may, by agreement, limit the scope of disclosure with a view, for example, to concluding a lump sum, clean-break, settlement he or she is not entitled otherwise to disregard statutory requirements or orders of the court. H v H [1991] HKLR 376. On the other hand, once such requirements or orders have, prima facie, been complied with, the degree of particularity to be required in cases where the assets of the parties are considerable may well be a matter for the exercise of the court's discretion. Thyssen-Bornemisza v Thyssen-Bornemisza (No 2) [1985] FLR 1069. It was not, in the circumstances of this cause, surprising that after seeking further particulars by letter, in vain, the wife issued a summons for such relief on 27 January 1992. However described in the margin her application must, I think, have been brought pursuant to rule 77(4).

5. Miss Mok, for the husband, has strongly argued that such an application is to be considered separately and apart from an application brought pursuant to rule 73(2), that the requirements of the latter rule are not imported and that this court should confine itself to the question "Has sufficient information already been furnished by the husband to allow a judge properly to exercise his jurisdiction under sections 4 and 6 of the Matrimonial Proceedings and Property Ordinance?" For reasons already given I do not think it has. Further, the judge hearing the substantive application will have to take into account the contribution which the wife made to the husband's present affluence. Preston v Preston [1982] Fam 17 at pp 28 and 29; Gojkovic v Gojkovic [1990] 1 FLR 140 at pp 144 and 145.

6. I would order the husband to serve on his wife, by her solicitors, within 28 days from today's date, the following particulars:

"(1) of his income, howsoever derived, including that from employment, pension or annuities, interest on bank deposits, dividends or any other sources; and producing all relevant documents

(3) of his stocks and shareholdings, whether in public or private companies in Hong Kong or abroad, whether the interests are held directly or indirectly, or by others on his behalf and whether held jointly with others together with all relevant documents;

(4) all articles of a value exceeding HK$50,000 including jewelry, antiques, works of art etc belonging to him, whether the same are held directly or indirectly, or by others on his behalf and whether held jointly with others together with all relevant documents;

(5) all monies held by him, whether in his name, jointly with others, directly or indirectly, by others on his behalf in Hong Kong or abroad, whether the same be held in banks by ways of bonds or otherwise together with all relevant documents."

7. As regards the appeal against the refusal of Judge Surman to order a transfer to the High Court I am much influenced by the fact that six days are available to the parties in the District Court as from the 20th of September next, by the consideration that the judges of the Family Division, sitting in the District Court, are familiar with this class of litigation and by the absence, presently at least, of any difficult question of fact or law. I would dismiss that appeal.

8. I would also make an order nisi that the costs of the hearings before Judge Surman and before us be costs in the ancillary proceedings [No 991 of 1991].

Litton, J.A.:

9. I concur with the orders which my Lord the Vice-President has proposed. As regards the appeal against the refusal to transfer the proceedings to the High Court, I have nothing to add.

10. Concerning the application for further particulars of the husband's capital and income I agree with my Lord the Vice-President that one starts the consideration of this matter with section 7(1) of the Matrimonial Proceedings and Property Ordinance and the various sub-paragraphs therein set out. In this regard Miss Mok, counsel for the husband, urges upon us that the proper approach is a broad and general consideration of the resources of the parties; against that backcloth, the court assesses the wife's reasonable requirements and the husband's ability to meet those requirements. She cites in support of this proposition the judgment of Anthony Lincoln J. in P. v. P. (Financial Provision) [1989]2 FLR 241. I agree generally with such an approach. It is important in these family matters to avoid microscopic investigations and costly valuations which put further strains upon the resources of the parties, heighten the emotional climate and risk indirectly harming the interests of the children. However, the husband has, in this case, fallen so far short of what Rule 73(2) of the Matrimonial Causes Rules requires by way of "full particulars of his property and income" that an order for further information under rule 77(4) is clearly justified. I have reached this conclusion irrespective of whether the wife in this case has contributed in any significant way to the husband's wealth or not. This will plainly be a contested issue at the section 7(1) hearing. Assuming that the wife made no significant contribution, nevertheless further particulars of the husband's capital and income would still be necessary for the court to discharge its functions properly. It is likely that the court would make, in a case like this, an order for a lump sum payment to the wife, in order to achieve a clean break; the practical implementation of such an order would still be the concern of the court. A statement by the husband that he has "no liquidity problem" and is able adequately to meet any order of the court gives the court no idea as to the nature of the assets from which a substantial lump sum order might be met.

11. Obviously where the husband's financial affairs are highly complex, as in Thyssen-Bornemisza v. Thyssen- Bornemisza [1985] FLR 1069, and he has made a conscientious attempt at disclosure, the court will prevent the use of rule 77(4) of the Matrimonial Causes Rules as an instrument to harass and oppress. The present is far from such a case.

Bokhary, J.A.:

12. I agree with my Lords. There is only one matter on which I wish to add something. On behalf of the husband, Miss Mok expressed this fear: the more financial disclosure he makes, the more such disclosure the wife will seek, and so it will spiral. That expression of fear echoes similar expressions made on behalf of husbands in past cases, including the leading case of H v. H [1981] HKLR 376, where Silke, J noted (at p. 378D) that counsel for the husband "goes on to advert to his fears of a Rule 77 questionnaire and seems to say that the more detail you give the more ammunition you provide to the other side to raise what amount to interrogatories."

13. These cases are, unfortunately, all too frequently attended by ill-feeling and mistrust in very large measure. There seems to be a tendency, sometimes well-founded and sometimes not, to see and fear the worse in every move which the other side makes and every stance which it adopts.

14. As to that I say this. Parties against whom financial relief is sought in matrimonial causes, generally although not exclusively husbands, have a duty to make such disclosure of their assets and income as is sufficient to enable the court adjudicating upon the application for such relief properly to perform its task. Since the circumstances vary so greatly from case to case, sufficiency does not readily lend itself to further definition. But, upon a level-headed consideration of the broad circumstances of each case, it should not be too difficult to recognize. If a party does not make sufficient disclosure, the court will, at the instance of the opposite party, compel him to do so. If, on the other hand, he does make sufficient disclosure, the court will protect him from the harassment of any application for further disclosure which the opposite party may make.

15. I realize of course that the mere dismissal of such applications may not always be adequate protection against them. They can be expensive and, whichever party may be made to bear costs, they can eat deeply into the family fortune out of which the Family Court must fashion its financial orders. So in certain instances, which hopefully will be rare and will become increasingly rare, orders as to costs under the provisions of Order 62, rule 8 may be appropriate.