XCHRX CHEN LILIAN HSIAO MEI OUNG v. CHEN SHIN TA MICHAEL

1991, No. 6

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

DIVORCE JURISDICTION

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J U D G M E N T

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INTRODUCTION

1. This is an application for ancillary relief, under Section 17A of the Matrimonial Causes Ordinance Cap. 179, by the Respondent husband. In that alone, it is an unusual application. But the circumstances are quite extraordinary, and I hope will remain unique.

2. The parties are both citizens of the USA, where they met in 1971 while studying, and subsequently married in 1976. After their marriage, they lived in Hong Kong where the Respondent worked in banking. The Petitioner's activities, however, remain a matter of considerable conjecture. There are two children, both born in Hong Kong, Michael on 26th February 1978 and Te-ming on 18th May 1982, so they are now 15 and 11 respectively.

3. According to the Respondent, the Petitioner was involved in and travelled a great deal on her own and her family (the Oungs) business interests. Her neglect of her married family led to arguments. In 1985, the Petitioner left the matrimonial home for about 1 1/2 months. Eventually, in January 1987, the Petitioner left for good, the two boys remaining with the Respondent.

4. On 23rd March 1990, the Petitioner issued a petition for divorce on the basis of at least two years' separation (which the Petitioner put as dating from 10th June 1985). She sought custody of the children but no order for ancillary relief or costs. On 2nd June 1990, the Respondent gave notice in Form 8 of his intention to apply for ancillary relief. A decree nisi was made on 20th June 1990. Thereafter, various affirmations, questionnaires and answers thereto were filed, culminating in this hearing of the Respondent's application. Unfortunately, the nature of this hearing cannot be properly understood without an excursion into the events that have taken place since 1988.

THE WARDSHIP PROCEEDINGS

5. In October 1988, the Petitioner took Te-ming to live with her in the flat which she occupied in Regent-on-The-Park. On 2nd March 1989, during the school term and without telling the Respondent, she took him to Taiwan where the Oung family live. This marked the beginning of what has been described as a campaign by the Petitioner to bring the Respondent to his knees.

6. On 17th April, the Respondent issued an originating summons, upon the hearing of which on the same day I made Te-ming a ward of court and ordered him to be returned to Hong Kong. I also ordered the Petitioner to appear before me the following day. The Petitioner did not appear although served with my order. I issued a warrant for her arrest. The warrant was executed and the Petitioner appeared the next day when I discharged the warrant. Eventually on 26th April, after a series of adjournments, Te-ming was brought into Court at 5.20 p.m. in time to forestall the real possibility of the Petitioner being committed for contempt.

7. On 30th May, another originating summons having been issued by the Respondent, Michael also was made ward of Court. By this time, the Respondent had care and control of both children. In November 1990, the Petitioner not having seen her sons since the earlier hearings, she applied for access. What happened next is chronicled in judgments of Kaplan J. and the Court of Appeal. I do not propose, therefore, to rehearse the history in detail.

Those judgments are relevant to these proceedings and binding on the Petitioner. It is important to note, I think, that Kaplan J. dealt patiently with a difficult lady and did his best to ensure that what appeared to be the Petitioner's interest in the welfare of her children, particularly Michael, was recognized as far as possible. The Petitioner met that considerate treatment with what can only be described as contempt.

8. In essence, having obtained limited access, the Petitioner immediately helped herself to more. She poisoned Michael against the Respondent. Michael ran away and stayed with a totally unsuitable relative of the Respondent called Camille King, a single working lady. Arrangements for local schooling came to nothing. Eventually, Kaplan J. ordered Michael to go to the USA to an outward bound type school called "Pathfinders". The Petitioner appealed and obtained an immediate stay. That effectively thwarted the order. Pending appeal, Kaplan J. made an order by consent for Michael to go to USA under escort arranged by the Respondent for interview by an educational specialist and to attend a golf school. On arrival in San Francisco, Michael was hijacked by a person who was apparently the Petitioner's lawyer. Michael was taken to the home of the Petitioner's sister where he has stayed ever since. The Respondent has not seen Michael and has had no communication with him. Even letters and gifts are returned.

9. The full flavour of these unhappy events can be obtained from the judgments to which I have referred. In his judgment given on 12th December 1990 in relation to taking Te-ming to Taiwan, Kaplan J. said at p.11:

"Although there was no order preventing her from so doing, the taking of Te-ming to Taiwan during school term without the consent or knowledge of the father was a provocative and ill-thought out decision on the part of the mother."

10. In February 1991, Michael ran away from home as a result of an incident involving the Respondent. Kaplan J. saw Michael in his room the following day, 8th February, and in his judgment given the same day said at p.2:

"It is clear to me that the mother's relationship with Michael has improved quite considerably from the time when I first saw Michael. This was something which I hoped for because it was obviously desirable for Michael to develop a good relationship with his mother. Because I am satisfied from what Michael has told me and from what Miss Mok has told me that this relationship is doing well, I am prepared to increase the amount of access that the mother has to Michael. I now order that the mother has supervised access one Sunday, unsupervised the following Sunday and supervised again with his brother, of course, on the next Sunday. The mother has the right, and I encourage her to and always have done so, to contact Michael whether by telephone or by letter during the intervening period. I stress that at the moment I am not prepared to allow her to have uninterrupted access during the course of the week. Whether that is something to move to in the future, I know not, but in my judgment having considered this matter carefully, it is far too soon.

In relation to the incident last night, it may be in due course I will have to decide precisely what happened when I have seen affidavit evidence and possibly cross-examination if that becomes necessary. However, I have spoken to Michael and I am quite satisfied that Michael has not been subjected to the sort of violence that would justify taking him away from his father for a week."

11. On 12th March, Michael ran away again. He was immediately brought to court. Kaplan J. ordered Michael to stay with the family of a school friend called Williams. Michael left there on 17th March and lived with Camille King. He did not attend school. In April, the Respondent applied to send Michael to USA to Pathfinders. After a hearing lasting 6 days Kaplan J. delivered judgment on 6th May. At p.4 he said:

"I saw Michael and was aware of a change in his attitude, demeanour and behaviour since I first saw him in November 1990. When I told him that I thought boarding school was best for him and that seemed to be everyone's view he became angry, distressed and rude. I tried to tell him that I was trying to find somewhere for him to go while a suitable school was found but he was not prepared to talk about it and because of his anger and rudeness, I terminated the meeting."

At p.5 the Judge continued:

"The mother has made no formal application in relation to either boy. Despite me making it clear in March that Michael wanted to be with her, she has made no formal application for care and control in relation to Michael. Despite refusing any supervised access after 14th February, she has made no formal application for unsupervised access in relation to either child.

Mr. Thomas on her behalf tells me that she has been impressed by my statement that boarding school is clearly best for Michael and she is now prepared to investigate this and is prepared to take Michael to San Francisco for assessment and is prepared to see the schools suggested. At the end of Thursday's session, she asked me for access that evening in order to try and persuade Michael to go to a school. I granted this request. Next morning, she told me that Michael was prepared to go to a school and in fact she has taken him to see the headmaster of the Chekiang School in Quarry Bay who subject to formalities was prepared to take Michael forthwith. She suggests that this be done and that Michael complete this term at this school and at the end of term she is prepared to take him to be assessed and view prospective schools in U.S. She is against Pathfinders for fear that Michael will come into contact with young people who have been involved with drugs and alcohol. I spoke to Mr. Parr about this and he assures me that the programme he runs is very small well supervised and that there is no question of drugs or alcohol being available even though it is possible that another child on the programme might have abused himself at home, hence his involvement in the programme."

At p.8, the Judge had this to say:

"The amah Ah Mui gave evidence in conformity with her affirmation. I accepted her evidence. She confirmed that Michael 's behaviour did change when access commenced. She confirmed that Mr. Chen is a kind, caring and loving father. She also confirmed that she overhead a telephone call between Michael and mother when the mother said that Michael had said the wrong thing to the judge and that his father might kill him. This piece of evidence lends some credence to the father's fears and allegations. I do not accept the mother's denial of this incident.

.....

I also wish to make it perfectly plain that I attach no blame whatsoever to the father. He had up till December 1990 brought up these boys on his own for some time and all the evidence shows him to be a caring, loving and concerned father. He must be quite bewildered at what has happened in relation to Michael. Both boys bore out the father's love and care when I saw them in November and Te-ming still does. Michael's school reports bear out the father's concern in relation to Michael. The amah's evidence also bears out his love and care."

The Judge continued on p.9:

"The mother asks me to give Chekiang a chance before trying something as drastic as Pathfinders. She asks for more access in order to try to get Michael in the boarding school frame of mind by the end of the term.

The choices could not be more stark nor more difficult to make.

The key to the mother's proposal is whether she can be trusted. I think she knows that I have had my doubts about her sincerity. She knows that I am most suspicious that Michael's attitude to his father worsened as soon as she started access. She knows I was critical of her breaking my order in December. She must suspect that I think it likely that she sees things in terms of winning and losing as opposed to just what is best for Michael. She probably knows that I suspect her last minute conversion to boarding school is tactical and not as genuine as Mr. Thomas makes out on her behalf. I hope I am wrong on this point.

I cannot bring myself to conclude with confidence that I trust the mother. She has to go a long way to gain my confidence in her motives. Should I give her a chance to see whether she can persuade Michael to get back on the rails and accept my decision as to boarding school? Or should I accept the Pathfinders approach and risk losing her assistance in attempting to persuade Michael that my decision is best and has to be accepted."

Finally, the Judge said at p.10:

"In the final analysis, I have just been persuaded that I ought to give Chekiang a try. If he stays there and gets counselling encouraged by the mother, we may well be on the way to getting him accept boarding school. I am prepared with reluctance to give the mother this one opportunity to show that she can be an influence for the good as far as Michael is concerned. If this does not work or if my order is disobeyed or undermined, I will not have the slightest hesitation in sending Michael to Pathfinders or some such similar establishment."

12. Things did not go as planned. Following a further hearing on 16th May, in a judgment delivered that day, Kaplan J. said at p.3:

"Having structured my order with these matters in mind it came as a great shock to discover:

1. Michael had attended school on Monday 6th May but not for the rest of the week. In flagrant breach of my order I was not informed of this until I believe the Friday 10th May. I hasten to add that this was through no fault of the mother's solicitors who wrote to the court as soon as they were informed of the position.

2. The mother left Hong Kong at the weekend before I delivered judgment on the Monday, and thus did not avail herself of the access she sought. She returned on Monday and was told the terms of my order but although her solicitor sent her a copy she did not read it. On the Wednesday she went to Malaysia on business not having picked up the judgment. She returned to Hong Kong for a few hours on the Friday and then flew off on a holiday to Thailand and returned last night. So she missed both access periods and was not available to take Michael to the Williams'.

I should add that this was the same mother who told me on oath that she could re-arrange her business life so as to be able to make a home for and live with Michael. Yet in this most crucial week she absented herself completely and by so doing has completely wrecked the effect of the court's order. Her evidence to me today was that she ran away from reality.

An affidavit from Mrs. Williams was put in this morning. Apparently the mother had phoned her after Mrs. Williams had submitted an affidavit on 26th April. She says it was not a pleasant conversation. The mother said she was shocked and angry with Mrs. Williams' affidavit. Mrs. Williams was given no chance to speak. She said the mother told her that she the mother had sent the affidavit straight round to Michael. The mother then alleged that Mrs. Williams had ruined a good relationship between Michael and Zachary. Mrs. Williams then goes on to say that for a number of reasons she is not now prepared to accept Michael and I of course accept that and will have to vary that part of my Order which ordered Michael to live there....

Today the mother gave evidence and told me about her recent travels. She admitted that she had sent Michael all the affidavits in this case and not just Mrs. Williams'. I find this extraordinary and unforgivable and it shows to what lengths this lady will go to attempt to poison the mind of this very susceptible 13 year old boy. It is bad enough on its own but it is also a clear breach of my order dated 15th April to the effect that affidavit evidence and correspondence between solicitors and school reports be not handed over to anyone other than the solicitors on record. I was shocked when she told me that she had not read my judgment and that I think shows clearly that she resents the court's involvement in her affairs and will do whatever she can to frustrate the will of the court unless it coincides with her wishes. She believes that in someway she is above the law as the history of this case will amply demonstrate. I have found her to be a most unsatisfactory witness and the trust that I hesitatingly afforded her recently has been destroyed by recent events which themselves have confirmed past events."

13. The Judge then made the Pathfinders order, which was stayed the following day.

14. The matter was referred for directions to Kaplan J. who hardly surprisingly was at a loss as to what to do. Eventually, on 2nd July, by consent, an order was made for the Respondent to arrange to take Michael to USA for an interview by an educationalist, attendance at a golf school, and return to Hong Kong by 31st August for consideration of Michael attending an appropriate boarding school. On Michael's arrival in San Francisco, as I have said, Michael was hijacked. The only inference is that this was by the Petitioner's arrangement.

15. On 12th September 1991, Kaplan J. delivered judgment in relation to the Respondent's application for indemnity costs arising from nine hearings. Kaplan J. granted eight orders for such costs. At p.3 he said:

"I cannot recall a case which has presented so many problems nor can I recall one where one of the parties has behaved in the manner that this mother has....

I must conclude that I do not think it is a coincidence that Michael's behaviour started to deteriorate as soon as the mother had access to him. I have seen Michael on a number of occasions and I have noted a change in his attitude. Of course, I have throughout reminded myself that he is a teenage boy, and that teenagers frequently do become more and more difficult as they get to grips with the growing process. However, the situation here is so extreme that I do not think it possible to put it all down to hormone changes in a teenage boy. This mother broke my access order the day following the first access she had enjoyed for 18 months. In view of the way that things have developed I am quite satisfied now that the mother has embarked upon a course of conduct designed to alienate Michael from his father for her own spiteful ends. She is one of those rare litigants who believes that she is above the law and finds it hard to accept that her wealth does not actually bring with it the results that she desires. In view of what has happened I bitterly regret having given her any access to Michael although I do not blame the father for not actively opposing supervised access. No one could have foreseen the lengths to which this woman would go to cause pain to her husband in order to get her own way."

16. In relation to the Petitioner having given Michael a bundle of affidavits used in the proceedings, the Judge said at p.5:

"This was the clearest possible breach of my order dated 15th April 1990 to the effect:

"That affidavit evidence and correspondence between the solicitors and school reports be not hereafter handed over to any person other than the solicitors on record or the parties themselves (save and accept the report of Dr. Fung) without the leave of the court."

This breach was a most irresponsible and damaging act which could only have been done with the ulterior motive of further alienating Michael from his father, and indeed from his friend's parents Mr. and Mrs. Williams."

17. On the same page, the Judge said in relation to the amah's evidence about the telephone call:

"For a mother to say to her son what I found she did say is quite disgraceful and underscores my conclusion that she is fired with a desire to ruin the father's relationship with her son, and will stop at nothing to achieve that end. I regret to say that at present it seems as if she has succeeded."

18. In relation to the judgment which he gave on 8th February, the Judge said:

"The application to give care or control to Camille King at the time it was made was an abuse of process. There was no ground made out for a change in care and control and Camille was quite the wrong sort of person to be suggested.

....

I have no hesitation in concluding that the whole situation which led to this hearing was contrived in an opportunistic manner by the mother."

19. On 13th March, the Petitioner had applied for Michael to be separately represented. At p.9 in his judgment, Kaplan J. said:

"It was a hopeless application and was part of the juggernaut approach that the mother instructed her solicitors to follow."

20. As to the order made on 6th May, the Judge said:

"At the end of a week's hearing, which included the Saturday morning, I delivered a written judgment on Monday, 6th May. The mother did not even have the courtesy to be in court. In fact she was out of Hong Kong. My judgment makes clear the issues that I had to resolve. I gave the mother one final chance to show that she could be trusted and had Michael's best interests at heart.

Having told me that Michael could start at the Chekiang School that very day, he was in fact not able to commence there for a week, and I was not told about this until the end of that week. She did not even bother to read my judgment which was sent to her office. This was irresponsible and disrespectful, but unfortunately par for the course. She knew what the order meant, because Miss Chu explained it to her on the telephone. She knew she had to take Michael to the Williams' family on the Sunday, but remained outside Hong Kong so that the whole order was rendered useless. I am quite satisfied that she could have come back if she wanted to, but that it did not suit her purposes. This was the woman who a few days earlier had said that she would cut down on her business activities in order to look after Michael, but when the court gave her a chance to move towards that end she was too busy with business and pleasure.

It was during this hearing that she admitted giving all the affidavits and documents to Michael, which not only was a contempt but was the most irresponsible course imaginable. It was also during the course of this hearing that I heard the evidence of the amah, Ah Mui, who gave evidence which I accepted and which further indicated that the mother will stop at nothing to achieve her ends."

21. In relation to the Petitioner's application for care and control on 13th May, the Judge said:

"On this occasion, despite being out of Hong Kong, the mother took out an application for care and control of Michael. It was not supported by any affidavit and Mr. Thomas, who appeared for her, frankly conceded that he could not proceed with that application. The application for care and control was absurd in all the circumstances. Miss Chu gave evidence about the mother's movements since the conclusion of the last hearing on Saturday, 4th May. It became clear when the mother's movements were explained that she had deliberately wrecked the order of the 6th May."

22. At p.13, the Judge said in relation to the Pathfinder's order:

"My order of the 6th of May having been effectively scuppered by the mother's lack of co-operation, I had on this occasion to decide what to do with Michael in the impossible situation which had presented itself. Having satisfied myself that the mother was not going to assist and would do all that she could to wreck court orders, and continue with her campaign to alienate Michael from his father, I decided to send Michael to the Pathfinder's programme in New Mexico as recommended by Dr. and Mrs. Andry."

23. Following the stay of the Pathfinder's order, there was a short hearing for directions as to which the Judge said at p.14:

"This had the effect of ending the Pathfinder solution, which was of course the purpose behind the application. This was especially so as the Court of Appeal can not hear this appear until October by which time the appeal will be meaningless. The mother thus achieved her goal."

24. In general terms, the Judge said at p.16:

"In making the above orders for indemnity costs, I take into account the totality of the mother's behaviour. She has embarked upon a course of conduct designed to place maximum financial pressure on the father. I do not believe that she is prompted by any desires of love and affection. She is far more concerned with her business interests. She sees Michael as a tool in her war against the father. I am aware of heavy financial litigation being conducted by her in the U.S. against the father and his family. She has proved herself to be wholly unreliable. She believes that her wealth puts her above the law.

.....

Mr. Pilbrow submitted that this being a wardship case each party should bear their own costs. Such a conclusion would be an affront to justice. Whatever might be the normal order this is no normal case. The costs are tremendous. Having concluded that the mother's conduct has been oppressive, has been prompted by ulterior motives, and at times has been an abuse of the process of court and contumelious, it would indeed be unjust for the father to bear any portion of these costs. The court must always be astute to prevent one party with unlimited means from pushing the other into financial ruin by the conduct of the litigation."

25. The Petitioner appealed against that order for costs. The Court of Appeal delivered judgment in relation to both appeals on 7th February 1992. After setting out the history, Sir Derek Cons, Acting C.J. said at p.11:

"The day after the order was made the Mother obtained from another division of this court a stay pending the hearing of her appeal on the grounds that to refuse a stay would render the intended appeal "almost nugatory". However the lack of any serious attempt to have the appeal heard immediately has had precisely that effect upon the original order, save that the adjective "almost" can be ignored. Michael is now living with his aunt in California, attending a local day school with his adoptive brother and sister. No progress has been made towards his attending a boarding school, nor even apparently any effort in that direction. For my part I see little, if any, prospect that he will ever be returned to this jurisdiction. I do not think it necessary to go into the details of how this situation has come about. It is sufficient to observe that the prime cause was conduct of the Mother taken deliberately to frustrate the effect of a consent order to which she had been party."

26. The appeal against the Pathfinder order was dismissed as academic without going into the merits. In relation to the appeal against costs, the Court of Appeal said at p.14:

"With respect to him (the Judge), his language is in some respects more extravagant than would seem to be justified on the face of the evidence. But it must be accepted that he had the advantage of seeing the mother on more than one occasion, which we did not. I do not propose to rehearse the evidence, which has been canvassed extensively during a hearing of just over seven days. It is sufficient to say that in my opinion it was fully open to the judge to come to the basic conclusion which clearly influenced him in respect of each occasion, namely, that from the very beginning of this chapter of events, i.e. the end of 1990, all the Mother's conduct, which was itself the root cause of the many proceedings before the judge, was deliberately calculated to alienate Michael from his Father."

DISCOVERY

27. The Respondent's application in Form 8 dated 2nd June 1990 gave the usual notice for the Petitioner to file an affidavit of property and income within 14 days. On 28th June 1990, on making the decree nisi, the Judge in the Family Court ordered:

"That the Petitioner to file an Affidavit of Means within 21 days and serve a copy thereof on the Respondent's solicitors of personal service of this order on him exhibiting hereto certificate of income and copies of all bank accounts for the past 3 years, copies of her business accounts including balance sheets covering 3 years and the Respondent do file his Affidavit of Means in reply 14 days thereafter."

28. That order was, and in spite of amendment remains, unhappily worded. I do not believe, however, that anyone was or could be in doubt as to its intent. By consent, the period was further extended to 28th August, although the Petitioner's first affidavit of means was filed on 22nd August. In paragraph 2, the Petitioner affirmed "The following is a full and frank declaration of my means..." I only observe that even now relevant and necessary information from the Petitioner is still awaited.

29. Being dissatisfied with that affirmation, on 17th September 1990, the Respondent sent the Petitioner a questionnaire. The proceedings then went to sleep although as can be seen the wardship proceedings were keeping the parties occupied. On 4th July 1991, the Respondent served his first affidavit of means. Some 17 pages thereof relate to his affairs. Although some further information and documentation has been supplied, in essence that affidavit appears full and frank and until the hearing no allegation has been made to the contrary.

30. On 21st November 1991, by consent, I ordered the Petitioner to provide by 14th December 1991, certain information as agreed in respect of the questionnaire. On 13th December 1991, the Petitioner made a request of the Respondent for further and better particulars of his affidavit. The Respondent answered on 15th January 1992. In contrast, on 3rd March 1992, the Respondent issued a summons for the Petitioner to provide full and frank disclosure, and for directions as to the hearing of his application for ancillary relief. There had been an exchange of correspondence between solicitors in February and March in which more information had been given by the Petitioner, which again the Respondent thought inadequate.

31. On 19th March, Mayo J. ordered by consent that the Petitioner within 28 days produce copies of all bank accounts and statements to which she was beneficially entitled, whatever the name of the account. He also ordered certain other information in relation to two bank accounts and adjourned the balance of the summons. On 27th April, the order not having been complied with, Mayo J. gave leave for application to commit the Petitioner. A summons was issued on 4th May. On 7th May, the Petitioner applied for an extension of time to comply with the consent part of the order of Mayo J.

32. Mayo J. heard the application to commit between 22nd and 29th May, delivering his judgment on the last day. In essence, the Petitioner had claimed that the banks did not respond to her letters seeking documents and information. She explained that she had not used draft letters provided by her solicitors because she did not want disclosed that she was involved in divorce proceedings. At the hearing before the judge, the Petitioner changed her explanation. In his judgment at p. 3, Mayo J. said:

"The petitioner was in the witness box for the best part of 3 days. I regret that it was strongly my impression that she was an evasive witness and lacking in candour and frankness.

The scope of her evidence was fairly extensive. She was taken through the background of the application for ancillary relief. I do not think that it would be unfair to say that she has been very reluctant to disclose information concerning her financial affairs."

At p. 4 he continued:

"I will now consider the much more relevant question of the efforts she has made to comply with my order of the 19th March. She was cross-examined at some length by Miss Mok as to why she had decided to write to the banks herself rather than instructing her solicitors to do this on her behalf.

She gave a different reason for this in her cross-examination. She said that the main reason for her decision was that she feared that if solicitors wrote to the various banks this would undermine confidence in Paladin which is a Publicly listed Company. She was Chairman of the Company and she feared that if it became known that solicitors were making inquiries concerning her accounts this could have an adverse effect on the Company.

I must say at once that I find this explanation totally unconvincing. I do not believe for one moment that this was the reason why she decided to write herself to the various banks.

I have no doubt that the reason why she wrote herself was that she intended that the whole matter could be further protracted. There are several indications to support this view.

The first is that I am satisfied that the attempts were half-hearted. She signed the letters using her name Lilian Oung when the accounts were in the name of Lilian Chen. I think it is very unlikely that she would have overlooked such a matter if she had really been concerned to comply with the order.

In addition to this she did not give a contact telephone number or address on the letters and it was apparent from the evidence given by Mr. Tong of the Hong Kong Shanghai Bank that the bank had communicated with the last address on their records which was the address of the matrimonial home. They had written a letter raising a query on the signature to that address and the letter had been returned unclaimed. They had therefore been unable to proceed with the matter. I find it to be incredible that an intelligent business lady such as the Petitioner would not have foreseen that problems would have arisen if care was not taken to ensure that the banks had a line of communication back to her in the event of requisitions being raised.

Perhaps equally revealing is the fact that I do not believe that she ever attempted to "chase matters up" after sending the letters at the end of March or the beginning of April until the 5th May when she gave instructions to her solicitors. It was not until 14th May that an application was made to extend the time for compliance with my order.

It is significant to note that when the solicitors did in fact write to the banks there was an almost immediate response and it would appear that the information required could be furnished within a reasonable time. In any event even if it had appeared that time was running short there is no reason why an application for an extension of time could not be made pursuant to the liberty to apply."

Finally, at p. 9 he said:

"Having regard to all of the evidence which was before me I do not believe that the Petitioner made any conscientious attempt to comply with the order before the expiry date provided in the order. I am accordingly satisfied beyond a reasonable doubt that it has been proved that the Petitioner has intentionally been in contempt of court."

33. Mayo J. imposed a fine of $250,000.00 and indemnity costs. Payment was made. He ordered information to be supplied by 3rd July. On 2nd July, the Petitioner applied to extend that time, in the meantime supplying on 3rd July some answers to an earlier request for further and better particulars.

34. On 7th July, Mayo J. made an order on the Petitioner's application that she was to provide the information and documents required by Annex A to his order within 28 days of service, that she was to provide other information within 21 days, and was to verify information already supplied. The Petitioner was granted an extension of 21 days from service to comply with the order made on 29th May.

35. On 29th July, the Petitioner applied for another unspecified extension of time. This was dealt with, by consent, on 7th August by Mortimer J., the Petitioner being given until 1st September to comply with the order made by Mayo J. on 7th July. On 26th August, the Petitioner filed an affirmation verifying the information but nothing else.

36. On 9th November, the Respondent applied again for full and frank disclosure. On 7th December, I ordered the Petitioner to supply further and better particulars as annexed to the order within four weeks of that date. On 30th December the Petitioner applied for a general extension, which I granted on 15th January 1993, allowing the Petitioner a further 14 days to comply with my order of 7th December.

37. The Petitioner applied on 28th January for further time. The following day, time was by consent extended to 9th February. On 6th February the Petitioner's then solicitors applied to cease to act, while on 8th February the Petitioner through her solicitors applied for more time to comply with the order of 7th December and for the hearing dates of this application to be vacated. On 10th February, I dismissed the Petitioner's application and gave leave to her solicitors to cease to act.

38. At the commencement of this hearing on 8th March, the Petitioner had not complied with the various outstanding orders against her. The reasons put forward by the Petitioner I shall come to later.

SERVICE

39. As I think has been shown, the Petitioner appears to have little respect for this court. This is further demonstrated by her attitude to service of process upon her. The order of Mayo J. dated 19th March 1992 was served on the Petitioner on 8th April. When the process server identified himself and his purpose, the Petitioner said she did not care. Upon her failure to comply with the order, it became necessary to serve contempt proceedings. On being approached on 5th May, the Petitioner said "don't bother me", refused to accept the documents and got in her car. The process server put the documents in the car beside her. As the car drove off, the window opened, and the Petitioner threw the documents out of the window.

40. In his judgment of 29th May, Mayo J. said at p.6:

"The explanation which she gave for this conduct was that she thought that the process server was a beggar and that her brother had advised her not to accept anything from anyone in such circumstance. In this connection it is relevant to observe that this was by no means the first time that she had been served with legal process. I entirely reject this evidence. I have no doubt whatever that she knew full well that she was being served with legal process.

I make reference to this incident to indicate the Petitioner's attitude towards the courts."

41. Following the order made by Mayo J. on 7th July 1992, initial efforts to serve it were unsuccessful, the process servers being known to the Petitioner. Two different employees of the Respondent's agents attempted service on 21st July. They waited for some hours at the Convention Centre where the Petitioner had her office. The Petitioner emerged at 9:00 a.m.. The process servers attempted to approach the Petitioner, but were prevented from reaching her by three men who formed a wall to obstruct them. In his decision of 7th August 1992, Mortimer J. said:

"There are affidavits before the court which indicate that the wife is taking elaborate precautions to avoid personal service. It is not the first time that there has been some difficulty about service. The wife is clearly aware of the position in relation to service of legal proceedings and if what is said in those affidavits is accurate, though I make no decision - it would seem to be clear from them that she is indeed taking steps to avoid personal service."

42. With respect, I entirely agree with the judge. Having regard to the totality of the evidence which has been canvassed before me, I have not the slightest doubt that the Petitioner both then and since has done her best to avoid the process of this court.

NON-APPEARANCE BY THE PETITIONER

43. On 9th November 1992, the Respondent made his 2nd application for full and frank disclosure. Miss Bebe Chu, the Petitioner's then solicitor, made an affirmation in relation to that application, exhibiting a draft affirmation for the Petitioner to affirm in accordance with the order made by Mayo J. on 7th July 1992. She deposed that she was advised by the Petitioner's office that they did not know the whereabouts of the Petitioner and that the Petitioner was in ill-health. A medical certificate in Chinese dated 25th November 1992 was also exhibited. It bore the name of no hospital or doctor; it stated "heart-disease, heart-pain, rest for half-a-month". In the circumstances, on 7th December I ordered the petitioner to provide further and better particulars specified in an annex to the order within four weeks of 7th December.

44. The Petitioner applied on 30th December for a further extension of time. Miss Chu provided for two further affirmations which:

(1) Exhibited a letter dated 22nd December from a person whose signature could not be identified, saying the Petitioner was in fragile health, needed rest and was not to be disturbed. The letter added "this extension is for a period of 3 months".

(2) Exhibited a medical certificate from Dong Zhi Men Hospital, Beijing dated 21st December, certifying the Petitioner was in Hospital that day, was examined for "heart-disease and angina pectoris" and "should be treated in hospital and avoid stress".

(3) Deposed that on 29th December, the Petitioner's sister telephoned to say that the Petitioner was unwell and resting in Shanghai.

(4) Deposed that Miss Chu believed the Petitioner to be too ill properly to instruct her and

(5) Deposed that on 10th January, a Mr. Leong phoned from Beijing to say that the Petitioner was in Cong Ri Hospital suffering from heart-disease and was unable to give instructions.

45. An affirmation from a director of Fact Finders, agents instructed on behalf of the Respondent, said that he had made enquiries by phone of Cong Ri Hospital on 11th January and been unable to trace the Petitioner as being there.

46. On 12th January, being informed that Miss Chu was booked to fly to Beijing to see the Petitioner, I adjourned the application until 15th January. On that day, Miss Chu in her 7th affirmation said that she had visited Cong Ri Hospital on 13th January and saw the Petitioner who appeared very weak and coughing and who was said to be suffering from pneumonia. Miss Chu was unable to speak to the Petitioner's doctor who was absent throughout her visit. Miss Chu said the Petitioner told her:

(1) That Mr. Yeung or Leong was helping her and could give details.

(2) She did not know when she could leave hospital.

(3) She had resigned as chairman of Paladin due to her health.

(4) She was unlikely to be able to travel to Hong Kong before Chinese New Year and

(5) To ask for an adjournment of the hearing for two months.

47. The Petitioner then broke down in tears. Miss Chu left. Miss Chu spoke to Mr. Yeung who said that the Petitioner first attended the Hospital as an out-patient on 6th November; she was advised that she should be hospitalized, but because no room was available, had had to wait until 9th January.

48. A further affidavit from Fact Finders deposed that telephone enquiries made of the Cong Ri Hospital showed:

(1)The Petitioner was admitted on the morning of 13th January.

(2)The Petitioner was not in her room at various times on 14th January and

(3) On 15th January, the Petitioner had disappeared from her room.

49. There was also an affirmation of Mr. Egerton, the Respondent's solicitor, which, inter alia, exhibited an extract from the South China Morning Post dated 3rd December 1992. This extract contained a report about Paladin Limited to the effect that the Petitioner had resigned as chairman upon a PRC company taking a large stake from her family. There was no suggestion of ill-health.

50. It is, of course, unusual to rely upon newspapers. The Petitioner herself, however, in her first affirmation of means referred to the circumstances in which she became a director of Paladin as being "well-documented in the Press".

51. I was gravely suspicious about the Petitioner's ill-health over the previous two months. I felt, however, that I could not ignore Miss Chu's evidence and accepted that the Petitioner had pneumonia and was too ill to give instructions. I felt that with modern medicine he Petitioner could soon recover and travel to Hong Kong. Accordingly, I granted an extension of 14 days.

52. The Petitioner's next application, on 28th January, for an extension was by consent granted until 9th February upon the basis that Miss Chu, at the Petitioner's request, was going to Beijing on 2nd February and was to return to Hong Kong on 5th February.

53. On 10th February, I heard both the Petitioner's application for more time and to vacate this hearing, and the Petitioner's solicitors application to cease acting.

In relation to the latter application, Miss Chu said her trip to Beijing was cancelled by Mr. Yeung who had telephoned to say that the Petitioner was in Gansu Province where she was resting and receiving treatment for psychiatric illness. She was wholly unable to obtain instructions in spite of many requests through the Petitioner's office.

54. In relation to the application for time and to vacate hearing dates, Miss Chu exhibited two copy medical certificates from No. 1 Hospital of Lanzhou Medical College, both dated 5th February, which diagnosed "severe anxiety illness, schizophrenia", and recommended that the Petitioner should remain in hospital and avoid being mentally provoked.

55. A further affidavit from Fact Finders deposed that enquiries of Cong Ri Hospital, made both by telephone and in person, had revealed that the Petitioner had not been seen there since 14th January.

56. On all the information available, I came to the conclusion that the Petitioner was playing fast and loose with this court. I believed she could travel, could come to Hong Kong and give instructions if she wished. I dismissed her application.

57. About two weeks before this hearing, the Petitioner retained her present solicitors. On 8th March, when the hearing commenced, she was represented by Sir Oswald Cheung, Q.C. and two junior counsel. Sir Oswald informed me that the Petitioner would not attend the hearing for cross-examination as requested by the Respondent or at all because of ill-health. He said he was instructed not to apply for an adjournment of the hearing. For professional reasons, however, he asked for an adjournment of a week to enable him to come to grips with the case and be in a position to help the court. He said that, as the Petitioner would not be attending, the remaining week set aside for the hearing would be sufficient.

58. While I was prepared to accept from Sir Oswald, any submissions in relation to his professional difficulties, I said I would not accept from him any instructions emanating from the Petitioner until they were put in affirmation. De bene esse, however, I looked at a further medical certificate from Lanzhou Hospital dated 24th February to the effect that the Petitioner should remain in hospital, and also at letters from various persons, including a lawyer in Beijing, that they had withheld documents from the Petitioner to avoid provoking her in her illness.

59. An affidavit of Mr. Egerton, to which Sir Oswald objected as taking him by surprise but which I admitted, showed:

(1) Mr. Egerton spoke to the Petitioner's solicitor's office on 2nd March and was informed that the Petitioner's solicitor was in Thailand to see the Petitioner and

(2) The Respondent had received a collect call from Singapore on 27th February and recognized the Petitioner's voice.

60. After hearing argument, I ruled that nothing I had heard caused me to resile from my view that the Petitioner was playing fast and loose with the Court. If anything my concern had deepened. I observed that the hearing had been fixed for many months and that the Petitioner had had ample time to prepare for it. She had been dilatory and difficult and was the author of her own misfortune. I refused the adjournment sought but, by concession from Mr. Ching who appeared for the Respondent, I agreed to adjourn for two days.

61. During the course of the subsequent hearing, three further affirmations from the Petitioner were filed. Mr. Ching did not object but contented himself with saying that they should be accorded little or no weight in the absence of the Petitioner. These affirmations, however, disposed of any lingering doubt I might have had about the Petitioner. They were affirmed in Manila. The 7th affirmation was of 66 paragraphs. Plainly, the Petitioner was able to travel, give instructions and read, verify and affirm a lengthy and detailed affirmation.

62. It is perhaps worth noting that the Petitioner alleged that an agent of the Respondent had bribed nurses of the Beijing Hospital to obtain information. Apart from a total lack of particularity and failure to disclose the source of such information, the only agent of Fact Finders who went to the hospital recorded his principal conversation with the chief nurse. A transcript of that recording shows that he acted with complete propriety.

63. It was in these circumstances that the hearing proper commenced on 10th March.

64. I have dilated upon matters which might be thought to have no bearing upon the financial and property matters which are at the heart of any application for ancillary relief. For reasons which will become apparent, these matters are in fact crucial to a proper determination of the application.

RESPONDENT'S AFFAIRS

65. The Respondent filed two affidavits in relation to his financial position and exerted himself to answer the Petitioner's questionnaire, giving a further three sets of supplemental answers. He was tendered for cross-examination. Certain aspects of his affairs were probed but, in essence, his evidence was unchallenged. In so far as the Petitioner purports in any affirmation to dispute any matters, I reject her evidence. In the light of the Petitioner's demonstrated attitude to this Court and her failure to attend for cross-examination, it would be an abuse to attach any credence to her various allegations. I am satisfied that I have before me a full and honest account of the Respondent's affairs which I will attempt to summarize.

66. Between 1976 and 1986, the Respondent was employed in Hong Kong by Citibank in a senior managerial capacity and was an assistant vice-president. He had an expatriate package which enabled his family to live in comfort. He provided accommodation and paid all family expenses. The Petitioner's contribution was limited to occasional purchases of furniture and other gifts.

67. In 1986, the Respondent left Citibank and went into business with his brothers in Chen Group International, a Bermuda company based in Hong Kong. He provided financial and organisational advice as a consultant. The business was not a success. I am not surprised. The Respondent is a complete contrast to the Petitioner who, from all I have read and heard about her, is a typically ruthless businesswoman. The Respondent is a quiet man who, I have to say, does not appear to me to have the characteristics required to succeed in business on one's own account. He is highly educated and undoubtedly very experienced, but is better suited in my judgment to an employed rather than a self-employed position.

68. Accordingly, having lost money in the enterprise with his brothers, in October 1989 the Respondent became employed by the National Westminster Bank PLC as its Regional Director Asia for international private banking. He had a generous expatriate package which, inter alia, enabled him to provide a four-bedroom flat in Bowen Road, maintain the family and save some $10,000 per month. He still occupies a similar flat in the same block. He had a modest port-folio of shares and an interest in his father's estate worth approximately US$1.2m, a flat in New York worth about HK$1.4m, life insurance worth US$25,000 and about HK$1.3m in savings in various bank accounts. He also had interests in certain Chen family businesses in California.

69. The Respondent says, and I accept, that over the years he helped the Petitioner and the Oungs by introducing them to useful financial and business contacts in Hong Kong and China. He signed some guarantees for the Petitioner or companies with which she was connected. He helped her to set up her first office.

70. The Respondent's current position, however, is very different. He has lost his job, having resigned at the beginning of 1992. Resignation was effectively forced on him by the bank, largely because he had been spending too much time on his personal affairs and not properly fulfilling his duties. A contributing factor, however, was undoubtedly that the Petitioner arranged for both Camille King and Michael to call the bank causing the Respondent embarrassment. The Respondent has been doing his best to find new employment, but without success. He approached four banks, one of which indicated that he is too old. He has registered with six leading recruitment agencies. He is investigating possible business ventures on his own, but now lacks the necessary capital.

71. Apart from losses incurred in relation to the Chen Group, the Respondent's capital and savings have been wiped out by three factors. First, usual living expenses. Second, the costs of these proceedings which are now in excess of HK$5m. Third, litigation in the USA which has destroyed his interest in the Chen family businesses, left him with a possible liability on a judgment for US$5.5m, and involved other costs to date of US$110,000.

72. The USA litigation requires explanation. 821 Market Street Associates Limited (821) was a partnership which owned property in San Francisco which it intended to develop. Another partnership Glaurung Limited owned 1% of 821 and was its general partner. San Francisco Apparel Mart (SFAM) was another partnership which owned 99% of 821. 821 was the only asset of these two partnerships.

73. By inheritance from his mother or father or both, the Respondent acquired interest of 12% in Glaurung and 4.47% in SFAM. He was singularly ill-informed about his acquisition and the value of these investments and took no interest apart from payment of dividends. He left his two brothers to run the business.

74. In 1986, the Respondent agreed to become general partner in Glaurung in order to achieve a tax advantage for the business. He gave his brothers a power of attorney to enable them to continue running the business. He resigned 12 months later in December 1987 in favour of another company, there apparently having been a change in the tax position.

75. In the meantime, at the beginning of 1987, the Respondent's brothers came to Hong Kong to discuss the sale of 821's property with various persons including the Petitioner. While the discussion was going on, 821 encountered liquidity problems because of conditions in the USA. The Petitioner agreed to loan them US$1m, but directed her brothers to Sward Finance Limited, a Hong Kong finance company controlled by the Oungs. This company eventually advanced US$450,000.

76. Agreement was reached to sell the property to the Oungs for US$59m. In circumstances which are disputed, and of which the Respondent has only second hand knowledge, a contract was signed on 14th September 1987 for a sale at US$49m. The sale was to be to one of the Petitioner's brothers who assigned his interest to Chen Yin Company Limited a vehicle of the Oungs. On 13th November 1987 821 failed to complete, having entered into negotiation with other parties for a better price. In May 1992, Chen Yin was allowed a claim in bankruptcy proceedings against 821 which, with costs, amounts to approximately US$5.5m.

77. Chen Yin has also brought proceedings against the Respondent personally for damages of US$21m, a claim which was later reduced to US$5m. Although this claim has been struck out as time-barred, the possibility of an appeal still remains with attendant costs and perhaps further proceedings in the action. Plainly, if this action should continue, and continue successfully, the Respondent will have a liability of over US$5m.

78. The question, however, is whether the Respondent is at risk of personal liability arising out of the 821 proceedings. Sir Oswald submitted that he is not, that Glaurung and SFAM are limited partnerships and that therefore any personal liability flowing to the Respondent will be restricted to the amount of his interest in 821 which is approximately 4.5%. Mr. Ching asserts that as general partner the Respondent's liability is 100%. There is no evidence of US law. I am, therefore, entitled to assume that the law is the same as that of Hong Kong. Under Hong Kong law the Respondent, as I understand it, would be wholly liable as a partner if creditors were unable to obtain satisfaction elsewhere. I find, therefore, that the Respondent is potentially liable for payment of US$5.5m.

79. Subject thereto, the Respondent now has assets worth between HK$600,000 and 1.4m, depending on whether he receives a balance of US$200,000 or 300,000 from his father's estate, the exact amount being uncertain. He is applying assets towards living expenses which amount to about HK$90,000 per month. That sum includes rent of HK$36,000 per month, a rate which the Respondent has negotiated with a friendly landlord. The real market rent is HK$50,000. Further, the Respondent has had to cut back on expenses to reflect his financial position. But for that, he estimates that for himself and Te-ming he would be spending about HK$125,000 per month and enjoying the high standard of living he had had before the marriage broke down.

PETITIONER'S AFFAIRS

(a) General

80. If the information which the Petitioner has given the Court is to be believed, she has no assets or income. In the course of the wardship proceedings, both Kaplan J. and the Court of Appeal were informed by Counsel for the Petitioner that she was a very wealthy woman. In November 1991, however, when the Petitioner was asked to pay the indemnity costs awarded by Kaplan J. she offered to pay by installments of HK$30,000 per month on the basis that she had no other means. This cut little ice with Clough J.A. who, during the course of the appeal, ordered the Petitioner to provide security for costs. In the event, since the wardship proceedings commenced the Petitioner has paid HK$4m for security for costs, the Respondent's indemnity costs of HK$1.2m and the fine of HK$250,000. In fact, she has to date paid a total of HK$11.6m for costs for herself, the Respondent and by way of the fine.

81. The Petitioner disclosed connection with several companies from which she said she derived no income as such, but received some fringe benefits. She was a director of Yau Loy Company Limited that acted as a conduit for the Oungs to trade with PRC. The management of the company was conducted by Antonio Ng and David Liu. She was paid no salary or benefits, but simply assisted the Oungs. She resigned in 1988 and the company apparently ceased trading in 1989. She has disclosed, however, that the company paid costs of HK$182,400 on her behalf to former solicitors. The wardship proceedings, of course, only commenced in March 1989.

82. To assist friends of the Oungs, the Petitioner took a non-executive directorship in Chong Shan Polyester Plant Limited. She visited the plant about three times in 5 years. She received no salary.

83. The Petitioner disclosed that she was an alternate director for one of her brothers in Li Lon Textile Company Limited, a trading and textile company. Antonio Ng managed the company. She received no salary. A company search, however, shows that she was appointed full director on 14th September 1992.

84. The Petitioner was director and shareholder in a Thai company, Li On Textile Company Limited. She received no salary and the company made no profits being taken over by bankers.

85. The Petitioner was a director and chairwoman of Paladin Limited, a public limited company in Hong Kong. She said that she had no salary or shareholding and was simply helping friends of the Oungs from Taiwan to recover investments. The only benefit she received according to her affirmations was nominee membership of two clubs. I have already referred to a newspaper report that it was the Oungs that sold interests in Paladin last year, when Antonio Ng became chairman in place of the Petitioner. While it is only a small point, later information showed that this company paid for a chauffeur and the expenses of a Rolls Royce used by the Petitioner.

86. I have already referred to Sward Finance Company Limited. The Petitioner had no apparent role in it. She has, however, the use of a flat in Regent-on-The-Park and a Rolls Royce owned by this company. The company has also paid HK$370,000 towards her costs and provides her with corporate membership of three more clubs.

87. The Petitioner also has the use of another flat in Regent-on-The-Park rented by a company, Li Tan Company Limited for the convenience of her brother Daniel when he visits Hong Kong.

88. The Petitioner also has the use of a second Rolls Royce. In her first affirmation, she said it was owned by a family friend David Chen. An affirmation filed by her solicitor during the course of the hearing shows that it is in fact registered in her brother Daniel's name.

89. In her first affirmation, the Petitioner stated that she owned 2,000 shares in Charoong Thai Wire & Cable Company Limited. Documents exhibited to her fifth affirmation filed during the hearing showed a shareholding of between 5,000 and 8,000 shares and payment of substantial dividends.

(b) Jewellery

90. The Petitioner affirmed that she has only one piece of jewellery which she owns. This is a jade bangle. It is an Oung family heirloom which will not be sold, and which indeed she cannot remove from her arm. She wears other jewellery which belongs to her mother. Analysis of bank statements and other documents, however, shows that she spent HK$5.5m in 1989 and 1990 in jewellery shops.

91. Willy Hui, a partner in a company gave evidence. As to one specific transaction for HK$562,800 he produced invoices made out to E-Hsin International Corporation. He said the Petitioner told him the goods were being bought for that company. He added that when he was previously working for another jewellery company, the Petitioner distinguished between pieces purchased for herself and someone else. He said she had been a frequent customer for 10 years.

92. E-Hsin is the main international trading company of the Oung family in Taiwan.

(c) Bank Accounts

93. The Petitioner disclosed two principal accounts, one a savings account with the Hong Kong & Shanghai Bank and a current account with Bank of Credit & Commerce. From 1988, these accounts showed withdrawals totalling HK$9.3m and deposits totalling HK$13m. Jewellery accounted for withdrawals of HK$5.5m and investment for HK$580,000.

94. A total of HK$1,145,000 was withdrawn by Fong Yuet Bing by bearer cheques. The Petitioner cannot recall why she authorised these withdrawals.

95. HK$650,000 was withdrawn by Yeung Yiu Yim by bearer cheques. The Petitioner said it was repayment of a loan.

96. Two other substantial withdrawals of HK$950,000 and 500,000 respectively were made. Other than that they were for expenses, the Petitioner is unable to recall the purpose. Indeed, her usual explanation for any payments or transfers was that they were for expenses or on the instructions of the Oungs from Taiwan.

97. HK$4m was paid into her Hong Kong Bank account by David Chen as an interest free loan, and HK$1.5m by Sward Finance. HK$7.5m was paid into the account with BCC. No explanation of these payments has been provided.

98. If the Petitioner is to be believed, she was little more than a banker for the Oungs.

(d) American Express Card

99. This card was provided by Sward Finance. Between June 1988 and December 1990, the Petitioner incurred charges of HK$2.1m and made payments of HK$1.8m. The shortfall appears to be explained by reversal of temporary credits. The details of the charges show that the Petitioner was flying frequently between the Far East and Europe, staying in good hotels and spending lavishly in shops of international repute.

(e) Horses

100. The Petitioner was specifically asked if she owned any race horses. She answered no. In February 1993, the Respondent discovered that the Petitioner had been buying horses in USA and France. On 13th February, I made an order under S.17 of the Matrimonial Proceedings and Property Ordinance, Cap.192, restraining the Petitioner from disposing of these horses. The horses are now subject to similar restraint orders obtained locally in Texas, Paris and Pau. The horses are the only identifiable property of the Petitioner and constitute the Respondent's only security for any award in his favour. They are worth about US$2m.

101. In her seventh affirmation, the Petitioner said that the horses are not owned by her but her brother. I observe that in an affirmation of her solicitor, which I refused to admit during the hearing, declarations of trust in favour of E-Hsin were exhibited. I comment that there may be problems for all sides in future.

(f) Costs and Fine

102. I have already mentioned the total of HK$11.6m which has been paid. Apart from the parties I have referred to, the Petitioner's brother, Li Lon Textile Company Limited, Antonio Ng, Yeung Yiu Yim and David Chen have contributed to paying the Petitioner's costs. Substantial sums have also been paid in cash from unidentified sources.

LAW

103. Mr. Ching made a number of propositions which Sir Oswald accepted as being the law according to the authorities cited.

104. It is permissible for the Hong Kong Courts to consider decisions of the English Courts. The same principles are applicable. C. v. C. Appeal 1989 No.88 (Civil) dated 9th May 1990 unreported.

105. Statute and case law require a spouse to make full and frank disclosure failing which the Court may draw all permissible adverse inferences against that party. In Payne v. Payne [1968] 1 WLR 1433, an appeal from a judge who overruled a registrar, Willmer L.J. said at p.396:

"The truth of the matter is, and it is abundantly justified, that he was not satisfied that he had had a full and frank disclosure from the husband as to what his resources were. As we now know, it is quite plain that he had not. In such circumstances it is well established that the court is entitled to draw inferences adverse to a husband who has not made a proper disclosure of his available resources. That was held by Sachs J. in J. v. J., a decision which was subsequently upheld, so far as that point at any rate was concerned, by this court. It was also held by Lloyd-Jones J. in Ette v. Ette, where it was again decided that it was proper to draw inferences adverse to the husband from the fact of his failure to make a proper disclosure. I think that is right."

106. Danckwerts and Russell L.JJ. agreed.

107. Conduct is a factor required to be taken into account by S.17A Cap. 179 under which this application is made and by S.7(1) of Cap. 192, the equivalent of S.25 of the Matrimonial Causes Act 1973. To be taken into account, conduct must be gross and obvious. See Wachtel v. Wachtel [1973] Fam. 72. Denning M.R. giving the judgment of the Court said at p.90:

"It has been suggested that there should be a "discount" or "reduction" in what the wife is to receive because of her supposed misconduct, guilt or blame (whatever word is used). We cannot accept this argument. In the vast majority of cases it is repugnant to the principles underlying the new legislation, and in particular the Act of 1969. There will be many cases in which a wife (though once considered guilty or blame-worthy) will have cared for the home and looked after the family for very many years. Is she to be deprived of the benefit otherwise to be accorded to her by section 5(1) (f) because she may share responsibility for the breakdown with her husband? There will no doubt be a residue of cases where the conduct of one of the parties is in the judge's words ante, p.80C-D, "both obvious and gross," so much so that to order one party to support another whose conduct falls into this category is repugnant to anyone's sense of justice. In such a case the court remains free to decline to afford financial support or to reduce the support which it would otherwise have ordered. But, short of cases falling into this category, the court should not reduce its order for financial provision merely because of what was formerly regarded as guilt or blame."

108. In Harnett v. Harnett [1973] Fam. 156, Bagnall J. put it this way at p.165:

"4. It will not be just to have regard to conduct unless there is a very substantial display between the parties on that score. Ormrod J. and the Court of Appeal in Wachtel v. Wachtel [1973] Fam. 72 used the phrase "obvious and gross." In this phrase I think that "gross" describes the conduct; "obvious" describes the clarity or certainty with which it is seen to be gross. But the conduct of both parties must be considered. If the conduct of one is substantially as bad as that of the other, then it matters not how gross that conduct is; they will weigh equally in the balance. In my view to satisfy the test the conduct must be obvious and gross in the sense that the party concerned must be plainly seen to have wilfully persisted in conduct, or a course of conduct, calculated to destroy the marriage in circumstances in which the other party is substantially blameless. I think that there will be very few cases in which these conditions will be satisfied."

109. I think the word "display" should read disparity.

110. The term "gross" does not carry some moral requirement. In Blezard v. Blezard [1980] FLR 253, Lawton L.J. said at p.257:

"At first instance in Wachtel v. Wachtel Ormrod J., (as he then was) had labelled the conduct which could properly be considered for the purposes of the 1970 Act as "obvious and gross". This court approved that labelling. This labelling has been misunderstood. It does not mean that the conduct has to be deplorable or depraved before it can be taken into account. As was pointed out by this court in West v. West [1978] Fam. 1 the word "gross" in this context does not mean gross in any moral sense but only that the relevant conduct to be considered must be of the greatest importance: see the judgment of Sir John Pennycuick at page 8 at H."

111. The conduct in question can be after as well as before the breakdown of the marriage or divorce. It is not confined to matrimonial misconduct. See Jones v. Jones [1976] Fam. 8. An extreme example is Evans v. Evans [1989] 1 FLR 351, where the conduct relied on was the wife's conviction of inciting others to murder her husband 35 years after the decree of divorce.

112. In England, statute law in relation to conduct was amended by the Family Proceedings Act 1984, which now requires the Court to have regard to:

"(g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it ..."

113. In Kyte v. Kyte [1988] Fam. 145, Purchas L.J. left open the question of whether the words "inequitable to disregard it" may give a broader discretion than that envisaged under existing authorities. For the purpose of this application, however, I do not think that any material difference arises and in any event the Hong Kong legislation has not been similarly amended.

114. Conduct in the course of the proceedings themselves can be taken into account. In B. v. B. [1988] 2 FLR 490, Anthony Lincoln J. said at p.495:

"Conduct: The husband relies on the wife's vindictiveness throughout the proceedings, to be inferred from her prolonged resistance to disclosing documents. There can be no doubt that there was great bitterness on her part, but I think it would be wrong to describe this aspect as conduct which it would be inequitable to disregard. There are, however, some very serious deficiencies and a dishonest statement in discovery, as well as an act of flagrant disobedience of a registrar's order on the part of the wife. Her advisers, on the face of the documents, appear to have allowed themselves to be the vehicle for her delinquent behaviour. The full details of her completely inadequate disclosure are set out in a document headed 'Schedule C' and I do not propose to repeat them here. The inadequacy could be dealt with by an appropriate order for costs, but the highlights of her woeful performance are as follows. On her own admission her business accounts for 1983 were false. They omitted not inconsiderable income derived from a Dutch TV company. They were intended to conceal the true position from the Inland Revenue. They were presented without qualification for use in this litigation. The wife's advisers in relation thereto were specifically asked to confirm that there was no other source of income than as set out in the accounts. The wife, through her advisers, confirmed that there was no other, although this was false. At the hearing a volte-face occurred. It became a part of the wife's case that she withdrew in cash from Holland as much as ?10,000. The wife bridled at the suggestion put to her by counsel that she was deceitful. However, she had never mentioned this revenue in affidavits or in correspondence. On the contrary, she had expressly, as well as by implication, denied its existence. Furthermore, on 3 February 1987 Mr. Registrar Segal ordered that a certain answer be given to a questionnaire under r.77 of the Matrimonial Causes Rules 1977 (SI 1977 No. 344). On 13 March 1987 the wife and/or her advisers boldly declined to answer. If this had occurred in isolation, it might have been excused as an oversight. But, in the light of the general conduct of the wife and her advisers in the process of discovery, I consider such conduct not only a contempt of court but also conduct which it would be inequitable to disregard. The wife sought to excuse her conduct by attributing it to the distress she had suffered on the death of her child. Such an event indeed evokes considerable sympathy, but it occurred four or five years earlier. I am entitled to take into account the conduct of the parties after they separated. I have no hesitation in holding that it would be inequitable to disregard the behaviour which was primarily directed at obstructing the husband's pursuit of his remedies. I have to reach an equitable conclusion and equity expects propriety from those who seek its remedies."

115. In Preston v. Preston [1982] Fam. 17, the Court of Appeal emphasised both that conduct in the proceedings can be taken into account and the importance of the spouse receiving provision in full. At p.29, Ormrod L.J. said:

"On the question of costs, the judge's decision to award costs on the common fund basis was an unusual order to make in this type of case. R.S.C., Ord. 62 r. 28(3), however, appears to give the court an unfettered discretion to order costs on this basis, but it is not in accordance with usual practice to do so unless there is a particular reason for departing from normal practice. It is sometimes vitally important for a wife to receive the provision made for her in full without having to find the difference between party and party costs, and costs on a common fund basis. That does not, of course, apply in this case, but the judge was very unfavorably impressed by the uncooperative and grossly dilatory way in which the husband's former solicitors had conducted the preparatory stages of the case, which must have considerably increased the wife's costs. In the circumstances, I would not interfere with the judge's order and would also dismiss this part of the appeal."

FINDING and AWARD

116. In the light of the history which I have recounted, I am in no doubt that the Petitioner's conduct has been gross and obvious and constitutes the most important matter to which I should have regard. The case is not, however, one of the type to be found in the majority of cases cited, where the court had to assess the totality of the assets and income available and divide them according to the court's findings. The effect of such division was that the party whose conduct was found to be gross and obvious received a smaller share than he or she would otherwise have done. Correspondingly, the other party received more. I am satisfied that the approach I should adopt is that of Mayo J. in Louvet v. Louvet HCDJ 5 of 1988 (unreported), who in circumstances not dissimilar from those in the present case said:

"All of this has led me to a conclusion that 1st Respondent is likely to be able to meet any order which may reasonably be made for the Petitioner's financial support. I do however accept that of necessity the details I have gathered together which comprise his financial situation can at best be described as vague and fragmented. This circumstance is most unsatisfactory and almost entirely attributable to 1st Respondent's failure to comply with court orders which have been made requiring him to give further particulars of his means.

Notwithstanding all of this, if, as I am prepared to do, I draw inferences that 1st Respondent has not yet fully disclosed all his assets, I do come to a conclusion that the picture which emerges concerning the 1st Respondent's overall financial position is that he is a very wealthy man."

In all the circumstances, I draw the inference that the Petitioner is a woman of considerable wealth, who can comfortably afford to pay, and in view of her conduct should pay, the provision that I consider reasonable. The provision sought by Mr. Ching on behalf of the Respondent comprises four elements.

(1) A lump sum to enable the Respondent and Te-ming to live at the same standard as before the breakdown until such time as the Respondent can re-establish himself. A period of 3 to 5 years is suggested as not unreasonable. 'Based upon monthly expenses, HK$5m is sought.

(2) A capital sum to enable the Respondent to re-establish himself in business. HK$10m is suggested. I reject this immediately. I have already remarked on the Respondent's business acumen. I cannot believe he really wants to burn his fingers yet again. I see no reason why the Petitioner should finance this.

(3) A lump sum for each child for their future education and general welfare. US$500,000 each is suggested, the sum preferably to be placed on trust for the childrens' benefit.

(4) Provision for potential liabilities arising from the US litigation.

117. I confess I find the last matter of the greatest difficulty. S.7(1) (b) of the Matrimonial Proceedings and Property Ordinance requires me to take account of the financial needs, obligations and responsibilities the parties have or are likely to have in the foreseeable future. Mr. Ching argued that these liabilities constitute a hole which has to be filled by the Petitioner. If it is not and if the Respondent is found liable to pay damages and costs, any sum awarded to him will be swallowed up, he will be no better off and his standard of living will be destroyed again.

118. Mr. Ching said that the remedy is in the Petitioner's hands. Because of her influence on the Oungs he said that she could drop any proceedings or undertake not to pursue the Respondent. Failing that, the liability must be provided for.

119. I accept that it would be right to take into account the usual liabilities of a spouse, for example, a modest overdraft or unpaid bills for household or family expenses. I find it difficult to accept that I should have regard to an enormous debt arising out of the a spouse's own family business, whether or not the spouse is actively involved. I acknowledge, however, that an element of spite has crept in, the Petitioner having apparently said that she will "sue the Chens to the bone".

120. In the end, however, I think I must accept that it was a large commercial transaction between the families of the respective spouses. Regardless of allegations of how the contract came to be broken (for the Respondent has given a version, albeit second hand, that suggests there was some fault on the part of the Oungs), broken it was and the Oungs have obtained a regular judgment in a US Court. It seems to me wrong and slightly absurd that the Petitioner, as a leading figure of the successful litigants, should in effect be required to fund the award that they obtained.

121. Accordingly, I make no provision.

122. Provision for the children causes no such difficulties. Sir Oswald was not disposed to dispute the Respondent's estimates of the cost of education and attendant expenses including air fares at high school, college and post-graduate school. For the purposes of S.10 of the Matrimonial Proceedings and Property Ordinance, he was not prepared to quarrel with an order for education up to the age of 23, which would effectively put both boys through college, but not necessarily post-graduate school which he thought too speculative. He argued for figures to take both boys to 21, being US$234,000 for Michael and US$354,000 for Te-Ming. These figures he said should be reduced by between 4% and 6% to allow for immediate payment.

123. I propose only to deal with Te-ming at this stage. Michael's situation and future is wholly uncertain. I adjourn the application in relation to him. As to Te-ming, I believe provision should be made for him to go on to post-graduate school. Both the Petitioner and Respondent were well educated. I believe both would wish Te-ming to be as fully and widely educated as themselves. 2 extra years should therefore be added to the cost producing a figure of US$426,000. I believe that figure should remain untouched, inflation and other contingencies compensating for the immediate payment.

124. Finally, therefore, I have to resolve what lump sum should be given to the Respondent to put him in the position he would have been but for the breakdown of the marriage. He had a high standard of living, partly because he himself had a good job and partly because the Petitioner paid her own way. The Petitioner further assisted by making available a Rolls Royce for use by the family, and what she referred to as "my boat" for outings. That boat is registered in her name but according to registration documents is owned by Li Lon Textile Company.

125. I think I must recognise that the Respondent has shouldered the family burden throughout the marriage either from his salary or assets; that the Petitioner has contributed substantially to him losing a well-paid job; and that it will be difficult if not impossible for him to find employment of similar nature and remuneration. I must also take into account that the Respondent will in future effectively have little or no responsibility for the expense of education. In my judgment, it would be reasonable to take a monthly sum of HK$120,000, and gross it up by reference to a period of 5 years, a period which will give the Respondent time to get back on his feet without the stress and worry of how to exist in the meantime. That produces a figure of US$7.2m. I do not think it should be discounted. I consider that the Respondent is entitled to the full benefit of advance payment in the circumstances of this case.

126. Accordingly, I order the Petitioner to pay:

(1) The Respondent a lump sum of HK$7.2m and

(2) a lump sum of US$426,000 for the education and general welfare of Te-ming, such sum to be placed on trust. The Petitioner is to bear the costs of setting up the trust and any ongoing fees and expenses.

127. I will hear the parties on costs and any necessary directions in due course.