ZY v. YATM

FCMC 9685 / 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 9685 OF 2011

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J U D G M E N T

(Preliminary Issues)

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Introduction

1. This is a preliminary issues hearing to determine three section 17 applications issued by the petitioner wife as follows:

a) A summons issued on the 11 January 2013 whereby the wife asks that the husband’s allotment of 90,000 shares in P Company Ltd (P) and 90,000 shares in C Company Limited (C) on the 14 February 2011 to a BVI company known as G Holdings Ltd BVI (G) be set aside;

b) A summons issued on the 11 January 2013 by the wife that the husband’s transfer of 10,000 shares owned by him in P to G on the 18 February 2011 and the husband’s transfer of 10,000 shares owned by him in T Limited (T) to G on the 25 January 2011 be set aside;

c) A summons issued on the 23 December 2012 that a transfer by the husband of 10,000 shares owned by him in C to G on the 18 February 2011 be set aside.  

2. Rarely has there been an application before this court where one party has so blatantly attempted to circumvent the court’s jurisdiction. The wife accuses the husband of blatant non disclosure. In addition to the dissolution and transfer of shares referred to above, the wife also says that the husband has failed to disclose other significant financial transactions. She says that he adopted a “catch me if you can policy”. She points to the fact that there have been eight First Appointment Hearings; she says that the husband concocted a story after the event to explain his actions and that his non disclosure was “deliberate and contemptuous”; she asks for costs of this four day hearing on an indemnity basis. It seems that the husband’s rationale was that the wife had no ground upon which to make a claim against his assets, he accuses the system of being unjust and says in his closing submission that “a marriage certificate must not become a licence to plunder”.  He says that he will challenge the applicability of LKW v DD to his case “all the way to the high court and court of appeal if needed”.  At one point he said that he had evidence that LKW v DD was a “fraudulent case”. There is a sense that the husband believed that a pre emptive strike was needed in order to secure his financial position.  

Background to the marriage 

3. The parties married in June 1996, when the husband was 48 and the wife 40 years of age following a relatively short period of cohabitation. In March 1997 they had a son, K, who is now studying at boarding school in the United Kingdom. The husband is a chiropractor and naturopath. The wife runs her own small business importing aromatherapy products into Hong Kong from overseas. It seems that the husband also regards himself as something of a “freedom fighter”. He ran for LegCo at one point and operates a non profit organisation called the “B Association”. He says that he wants to make Hong Kong a better place to live in.

4. The parties separated in November 2007. This was then a marriage of at least 11 years duration. The wife maintains that it was a relationship of approximately 16 years in total. Relations were cordial immediately following the separation but deteriorated rapidly after the husband issued proceedings for divorce on the 17 December 2010. When he refused to progress those proceedings the wife had no alternative but to issue her own divorce suit which she eventually did on the 18 July 2011, based on two years separation.  

The litigation

5. Matters progressed, albeit slowly. Initially the husband appeared to ignore the proceedings and did not attend the first three First Appointment hearings in the new suit. He also deliberately avoided being served with the new petition. A penal notice was endorsed on an order of the 10 October 2011 and leave was subsequently given for the wife to issue contempt of court proceedings. On the 9 January 2012, on the application by the wife, I made an order in the following terms:

1.  The Respondent whether acting by himself, or his servants, or agents, or representatives, or nominees or otherwise howsoever be restrained from selling, disposing of or encumbering or otherwise howsoever dealing with the following:-

(a) The property known as Unit X, X/F, S Building, XX Wong Chuk Hang Road, Hong Kong registered in the name of C Company Limited;

(b) The property known as Commercial Unit on X/F (including the lavatory & portion of the flat roof) Y Commercial Building, No. XX Jardine’s Bazaar, Hong Kong registered in the name of P Company Limited and

(c) The property known as Ground Floor, No. XX Broom Road, Hong Kong registered in the name of the Respondent’s deceased parents, YCJ and YLCY

Without leave from the Court or the Petitioner’s consent.

6. The husband appeared for the first time in court in the new suit following the making of that order. He asked for time to negotiate a settlement directly with the wife. The wife at that stage was asking for a settlement in global figures of approximately HK$16.5 million as follows:

18. Insofar as my objective in the financial settlement is concerned, I would like to achieve the following:-

(a) the Respondent set up an Education Fund of HK$5 million for K to provide for his future educational needs.  If this amount is not sufficient to cover all the education costs and/or school related expenses of K then I would like the Respondent to continue to pay for K’s education expenses;

(b) the Respondent to provide me with a lump sum of HK$10 million.  This, together with my own capital of HK$7.8 million, will provide me with sufficient capital to purchase a reasonable size apartment for myself and K and for me to have a capital cushion for the future and maintenance to draw on;

(c) the Respondent to reimburse me all rental, food and helper expenses of our client and K since separation in 2007 which amount to approximately HK$1.5 million; and

(d) the Respondent to pay for my legal costs.

7. Once engaged in the process the husband was slow to file his Form E and on the 22 May 2012 a further penal notice was endorsed on an order. He finally filed his Form E on the 4 June 2012 – approximately 18 months after he first filed his own divorce petition. He was originally ordered to file a Form E on the 10 October 2011. The wife had filed her Form E in accordance with the Practice Direction 15.11 on the 27 September 2011 nearly 9 months before the husband. In his Form E when asked about his interest in all businesses in Hong Kong or elsewhere, he says “not applicable”. He said that his net worth was just over HK$5.9 million. He failed to disclose an interest in any of the companies. He also failed to disclose the fact that he had transferred the sum of HK$7.5 million to his girlfriend in the United States.

8. As the litigation progressed the husband was also slow to provide additional information when requested. All in all he has behaved in the most appalling manner.  Information is still outstanding and requests have been made to subpoena the Registrar of the Probate Registry in order to obtain clarity with respect to his mother’s estate.  

The husband’s business

9. It is not disputed that the husband ran and indeed continues to run a number of businesses, some of which were established prior to the marriage, including the following:

a) The O Health Centre which is run through P. P is also the registered owner of an office in Jardine’s Bazaar that is valued by the wife at HK$42 million. P was set up in or about 1988 and appears to be one of the main vehicles through which the husband operates his business.  

b) The C Health Centre which is run through C. C is also the registered owner of real estate – namely a factory building that the wife has valued at HK$10.5 million. The company was set up in or about 1991.  

c) The Hong Kong C Centre which was set up in 1992 and was originally run through T.

10. In addition it seems that the husband was involved in a number of smaller ventures, which he had not previously declared and for which he had established a number of corporate vehicles including H Com. HK Limited (H), C Publishing Company Ltd (C Publishing) and the A Institute (A Institute). The husband’s case on these is that he had forgotten to mention them because they were worth nothing and of no importance. Time will tell whether this is true or not.

11. In summary the husband has been involved in alternative forms of health care for a considerable period of time. He is the founder of these businesses which include homeopathy, chiropractic, naturopathy, colonic health and so on and so forth. There appear to be two shops selling health care products plus the HK C Centre. The office in Jardine’s Bazaar is where he operates much of this from.

12. Up until the dilution and transfer of the shares the husband was the sole shareholder and director of P, C and T. According to the audited financial statements produced they appear to be profitable businesses which provided the husband with a good income. The husband admitted to earning in the region of HK$200,000 per month. Indeed immediately prior to the transfer of shares significant interim dividends were paid out to the husband – HK$500,000 each from P and T on the 5 November 2010 and 11 November 2010 respectively. Six months or so earlier i.e. for the year ended 30 June 2010 the husband took out a further interim dividend of HK$2 million from C. Thus in total he received HK$3 million.  

The 1^st and 2^nd Intervener’s and G   

13. G was incorporated in September 2010. On the 6 December 2010 the husband’s sister – the 1^st intervener and his niece – the 2^nd intervener i.e. his sister’s daughter were both appointed as directors of G and each acquired one share in G each. G is a BVI company.

14. Subsequently the husband transferred all of his shareholdings in P, C and T to G. He says simply that he is no longer the legal or beneficial owner of these companies.

15. On the 29 January 2013 the 2^nd intervener resigned as a director and transferred her share to her mother.

16. It is against this background that I am asked to consider whether or not the wife should succeed in her section 17 applications as referred to above. That is the only issue for consideration at this juncture.

Discussion

17. I must now turn to consider the issues, the law and the parties evidence as set out in their affirmations and as given orally by them during the hearing. I have also considered the evidence of the 1^st and 2^nd interveners. For the avoidance of doubt, in so far as the matters set out in this judgment differ from the evidence of the husband or wife, or of one of the interveners, that is because I have preferred the evidence of one of the party’s over the others or it is because I do not find the evidence given credible, or because I consider that the documents produced confirmed my findings of fact.

Setting aside dispositions

The law - generally

18. The wife has issued applications pursuant to s.17 Matrimonial Proceedings and Property Ordinance, Cap 192. This section states as follows:

(1) Where proceedings for relief under any of the relevant provisions of this Ordinance (hereafter in this section referred to as "financial provision") are brought by a person (hereafter in this section referred to as "the applicant") against any other person (hereafter in this section referred to as "the other party"), the court may, on an application by the applicant-

(a) it is satisfied that the other party is, with the intention of defeating the claim for financial provision, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, make such order as it thinks fit for restraining the other party from so doing or otherwise for protecting the claim;

(b) it is satisfied that the other party has, with the intention aforesaid, made a disposition to which this paragraph applies and that if the disposition were set aside financial provision or different financial provision would be granted to the applicant, make an order setting aside the disposition and give such consequential directions as it thinks fit for giving effect to the order (including directions requiring the making of any payment or the disposal of any property);

(c) if it is satisfied, in a case where an order under the relevant provisions of this Ordinance has been obtained by the applicant against the other party, that the other party has, with the intention aforesaid, made a disposition to which this paragraph applies, make such an order and give such directions as are mentioned in paragraph (b);and an application for the purposes of paragraph (b) shall be made in the proceedings for the financial provision in question.

(2) Paragraphs (b) and (c) of subsection (1) apply respectively to any disposition made by the other party (whether before or after the commencement of the proceedings for financial provision), not being a disposition made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any such intention as aforesaid on the part of the other party.

(3) Where an application is made under this section with respect to a disposition which took place less than three years before the date of the application or to a disposition or other dealing with property which is about to take place and the court is satisfied-

(a) in a case falling within subsection (1)(a) or (b), that thedisposition or other dealing would (apart from this section) have the consequence, or

(b) in a case falling within subsection (1)(c), that the disposition has had the consequence,of defeating the applicant's claim for financial provision, it shall be presumed, unless the contrary is shown, that the other party disposed of the property with the intention aforesaid or, as the case may be, is, with that intention, about to dispose of or deal with the property.

(4) In this section-

"disposition" (財產處置) does not include any provision contained in a will or codicil but, with that exception, includes any conveyance, assurance or gift of property of any description, whether made by an instrument or otherwise;

"the relevant provisions of this Ordinance" (本條例的有關條文) means any of the provisions of sections 3, 4, 5, 6, 6A, 8, 11 (except subsection (6) ) and 15; (Amended 69 of 1997 s. 33)

and any reference to defeating an applicant's claim for financial provision is a reference to preventing financial provision from being granted to the applicant, or to the applicant for the benefit of a child of the family, or reducing the amount of any financial provision which might be so granted, or frustrating or impeding the enforcement of any

order which might be or has been made at the instance of the applicant

under the relevant provisions of this Ordinance.

(5) The provisions of this section shall not apply to a disposition made more than three years before the commencement of this Ordinance.[cf. 1970 c. 45 s. 16 U.K.]

19. Therefore, if I am satisfied that the husband has made dispositions with the intention of defeating the wife’s claim for ancillary relief, then I may set those dispositions aside. I accept that I need to look at the actual intention of the husband at the time that the dispositions were made. I also accept that it must be clear that there was an intention to defeat the wife’s claim for ancillary relief, although it may not be the only or even the dominant intention of the husband given that “It is enough if it played a substantial part in his intentions as a whole”. (See Kemmis v Kemmis [1998] 1 WLR 1307).

20. In so far as the appropriate standard of proof to be applied, it is clear that I need to be “satisfied”. In other words I must have made up my mind that the husband diluted his shareholdings and transferred his shares to G with the intent of defeating the wife’s claim or potential claim for ancillary relief. (See also K v K (Avoidance of Reviewable Disposition) (1983) 4 FLR 31).

21. I agree that in considering the intention of the husband it is necessary to look at his conduct at the relevant time. Consequently I accept that the circumstances surrounding the making of these transactions are highly relevant.

22. Ms Yip has referred me to the rebuttable presumption found in s 17(3) Matrimonial Proceedings and Property Ordinance, Cap 192, referred to above. This states that if the dispositions were made less than three years before the s.17 application was made, then there is a rebuttable presumption that it was done with the intention of defeating the wife’s claim for ancillary relief. Here the relevant dates are the 25 January 2011, 14 February 2011 and the 18 February 2011 respectively. The applications are dated the 23 December 2012 and the 11 January 2013. Thus the burden is on the husband to show that he did not make the allotment and then the disposition of the shares with the intent of defeating the wife’s claim for ancillary relief. The burden does not rest on the wife.

23. The law on the subject was recently reiterated in the High Court judgment KJ v LMLM and KCK, HCMC 4 of 2010 dated the 8 November 2011. The Hon Mr Justice To summarized the three elements that are necessary in order to set aside the dissolution and transfer of shares as “intention, different financial provision and lack of consideration”. In that case, as in the one that is presently before this court, it was self evident that the court would make very different financial provision for the wife in the event that her application was successful. It was also accepted that the transactions took place for no financial consideration. The same could be said here – although rather late in the day the husband tried to argue that the transactions were somehow in payment for his sister’s former financial contribution towards him. There was little evidence of this however. The main thrust of the argument in both cases centred on the intention of the husband. Did the husband take these steps with the intention of defeating the wife’s claim for ancillary relief?

24. In considering the evidence in KJ v LMLM and KCK, To J made the following point –

267. In the present case, the transfer document was signed within the same month of the filing of the petition and the transfer was effected just two days before the filing of the petition or less than two days taking into account the time difference between the east coast of America and Hong Kong. Needless to say, the more proximate the transfer, the stronger is the inference that the transfer was effected for the purpose of preventing financial provision from being granted to the Wife and/or for the purpose of reducing the amount of any financial provision which might be so granted and/or for the purpose of frustrating or impeding the enforcement of any order which might be or has been made at the instance of the Wife. The present case is a far cry from the facts in Kemmis v Kemmis. The intention to defeat the Wife’s claim can be readily drawn under the factual circumstances of the present case.

25. As will be seen below, likewise in this instance, the close proximity of dates between the issuance of the husband’s first divorce petition, the dissolution and transfer of the shares, the settlement negotiations and the issuing of the wife’s second petition, are all highly relevant when considering whether or not it is safe to infer that the husband took these steps deliberately in order to defeat the wife’s claim for ancillary relief.

The Husband’s case

26. The husband’s case has developed over time.

27. On the 30 August 2012 the husband confirmed in his 1^st Answer to the Wife’s questionnaire dated the 27 June 2012 that his transfer of 10,000 shares in C on the 18 February 2011 and 10,000 shares in T on the 25 February 2011 to G “was a commercial decision”.

28. Subsequently on the 28 September 2012 when asked to explain why he had transferred all of his shares to G he said that:

Due to the complicated tax system in Canada, the Respondent decided to give away his shares for good and did not want any overseas assets to be counted in the event he re-established residency in Canada in due course.

29. However on the 5 October 2012, for the first time, he changed his stance and said that

My shareholdings in the Companies were entirely transferred to G Holdings Limited in early 2011 after a terrible incident happened in December 2010 causing my serious thought in relation to my future career and life style.

30. He said that he had been targeted by some dark elements in society and after a physical attack on the 30 December 2010 had decided to give up his shares and so that “he cannot be threatened or intimidated by any person anymore”.

31. He added

I am grateful to my eldest sister M’s [1^st intervener’s] financial assistance at the material time when I set up the Companies. Over all these long years of practice, I feel tired and want to live a free and quiet life just to concentrate on my healthcare work without any business ties and financial worries.

32. In his closing submission the husband reiterated all of these factors i.e. the need to avoid Canadian tax by restructuring his companies and the fact that he may be forced to leave because of the “black society elements”. He added that

33. The third reason why the Respondent needs to restructure the companies is that he is not a good money manager. The Respondent rarely checks his company accounts. He left his money matter to his company manager who is also his personal assistant and his investment decision to his sister, M. The Respondent left all his assets to his sister, M in his will now.

34. Money has always been an issue in the Respondent’s relationship. The Respondent’s sister, M paid off his first ex-wife so that he can live in peace. His second divorce now means more money. He really feels that money will attract the wrong kind of people to his life. Being a hippie at heart, the Respondent wants to be free. So he divest all his assets to his sister, M who has a proven track record of prudent money management even she has been a housewife most of her life. She always assists members of the family when there is cash flow problem. She is a reliable person to take care of the Respondent’s business.

35. The three reasons should be solid ground for the making the change in company structures. The proximity of the events that lead to the Respondent’s action and the divorce proceedings are coincidental.

The Intervener’s case

33. The interveners simply reiterated as best they could the husband’s case.

The Wife’s case

34. The wife’s case in contrast is simply that the husband is both the legal and beneficial owner of all three companies, that he continues to run these companies and that the dilution and transfer of shares was simply in order to defeat her claim for ancillary relief.

The transactions in question

a) Should the husband’s allotment of 90,000 shares in P and 90,000 shares in C on the 14 February 2011 to G be set aside?

b) Should the husband’s transfer of 10,000 shares owned by him in P to G on the 18 February 2011 and the husband’s transfer of 10,000 shares owned by him in T to G on the 25 January 2011 be set aside?

c) Should the transfer by the husband of 10,000 shares owned by him in C to G on the 18 February 2011 be set aside?

35. The burden is on the husband to show that he did not intend to defeat the wife’s claim for ancillary relief when he took the steps that he did.

36. The wife’s counsel makes the general points that the transactions were all made within three years of the wife’s petition. It is of note that this is the second petition in any event and that the husband had not progressed his own petition. There was no valuable consideration for these transactions and that the dispositions were not to disinterested third parties, but to family members. That much is clear. In addition I accept that the husband did not give a credible explanation for his actions. The stories referred to above were made up after the event in order to justify his actions.

37. In addition during the trial the following became clear, as stated by Ms Yip in her closing:

(a) The fact that there was no change at all on the Husband’s role as the sole administrator and master-mind of his business (run by the three companies) before and after the dispositions.

(b) The Husband remains the director. He continues to manage the business. He continues to pay the staff’s salaries using his personal accounts. He continues to pay the suppliers using his credit cards. He earns more or less the same amount of income as before, as confirmed by the Husband.

(c) The complete lack of participation in all aspects of the companies by the sister or the niece after the “take-over” by G.

(d) The sister’s acknowledgement during cross-examination that she has never even tried to know or learn how to man the business after the “take-over”.

(e) The degree of ignorance of the goings-on of the business as displayed by the sister frequently during cross-examination, which contrasts sharply with the Husband’s depth of knowledge of the business.

38. I accept that these factors all go to support the wife’s case with respect to the husband’s true intention, which was, it seems, to try to ensure, that by virtue of a pre emptive strike, that he put his companies beyond the reach of the wife and the power of the court.

39. To that end it is interesting to note the dialogue between the husband and the court on the 15 March 2013 when the husband said as follows:

MR Y: Okay, okay, now, so after I understood the situation and what we are prepared to do and then I, you know, I continued to have communication with the petitioner in our effort to try to make our own personal settlement and it’s been going on and we are still looking for, contemplating going back to our first mediator, Miss C, so this is an ongoing process and actually we’re very close to coming to an agreement.

COURT: If you reach an agreement quickly then you can file a consent summons and we can vacate the hearing dates.

MR Y: Okay, good.

COURT: But I’m not vacating the dates today.

MR Y: Yes, yes, so what I’m preparing to do now, you know, in order to – if we were to, inevitably when we have to go trial I don’t want to drag it on, you know, I have to go trial I don’t want to drag it on, you know, I want to make it a section, you know, then make it clear whether …

COURT: You won’t have enough time to do the section 17 and a full ancillary relief trial.

MR Y: Yes, so what I’m prepared to do at this stage, you know …

COURT: At the same time.

MR Y: Okay, what I’m prepared to do, because the section 17 is on arguing and my transfer of my company, right, so what I willing to do now, I will take back the company temporarily just so that she will not have to pay the half a million dollar unnecessarily and so that, you know, after the trial I will transfer back to my sister like I intended before. So I’m willing to …

COURT: So you realise that if you take back the company, that means that it will be accepted that those are your assets and any ancillary relief trial will take that into account?

MR Y: Yes, I understand the implications of it but …

40. In other words he acknowledged that he had the power to transfer the companies back to himself. It goes without saying that he would only be able to do that, if he had retained effective control of the companies. I accept that infact the husband has never given up the control of the companies. He is the beneficial owner and he continues to operate them as before.

The Dilution of the shares

41. During the trial the husband put the blame squarely at the door of his office manager. He strongly denied that he had made the decision to dilute the shares, although given that at that time he was the sole shareholder and director of all of the companies, it was clear that the decision had to be his and his alone. To put it bluntly the husband was simply not credible on this and almost every other aspect of the preliminary issues trial. I accept unreservedly as stated by Ms Yip that

The allotments to G, a company ultimately owned by his sister, coupled with the propinquity in time between the Husband’s Petition and the date of the allotments, in fact, just two months apart, strongly supports the inevitable inference that this was done with the intent to defeat the Wife’s claim for ancillary relief.

The transfer of shares

42. In a similar vein the transfer of shares all took place after the husband had issued divorce proceedings and had then chosen not to progress those proceedings himself. They also took place at a time when the 2^nd intervener was helping to facilitate an agreement between the parties; an agreement that did not come to fruition (see paragraph 43 and 44 below). Again the almost overwhelming inference is that the transfer of shares was premeditated possibly because there was a concern that a settlement could not be achieved on the basis of the husband’s offer. It is clear that the transfer of shares was designed to undermine the wife’s claim for ancillary relief.

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43. In an e-mail of the 29 December 2010 the 2^nd intervener put the following proposal to the wife:

I’ve gone through K’s [the son’s] expense claims with A [the husband]. I can only based on what D [the office manager] provided (Jan 2009 to Sept 2010) as you have made it clear that you will not provide a breakdown and I respect that. The proposals from A are as follows:

1. A will set up an education fund of $3,000,000 for K. The fund will be in form of either cash deposit or an interest bearing investment (stocks or bonds). The fund will be entrusted to a neutral third party (may be a law firm) and K’s future education needs will be drawn from that account.

2. A will contribute $6,000,000 for the purchase of a property, $2,000,000 will be in form cash upon the purchase and $4,000,000 will be mortgaged. A will pay the bank directly for the mortgage portion. The property will be under your name until K turns 18 (legal age in HK), upon which his name will be added and you and K will be joint owners of the property.

3. A will provide $16,000 per month for K’s expenses excluding school fees in HK and mobile phones (both of which is paid directly by A now and he will continue to do so). This amount will be deposited monthly directly into your account. The amount will include all household requirements (maid, utilities, etc) and all of K’s personal expenses. This payment will end when K leaves Hong Kong for school overseas.

As I mentioned, the amount of K’s expenses are based on actual figures D gave me and the utilities are based on an average household usage. I will try to be as neutral as possible in the negotiation and hopefully will be able to help both of you to come to terms without resorting to legal proceedings. Take a look at the proposal and let me know what you think. Just don’t shoot the messenger O:-) !

44. Thus it is clear from this that the 2^nd intervener knew precisely of the situation between the husband and the wife. She was actively involved in helping the parties negotiate a settlement. No doubt the wife trusted her. At the same time she was complicit, as was her mother, in ensuring that attempts were made to secure the husband’s assets and to put them beyond the reach of the wife. To that end I would reiterate that G was incorporated on the 13 September 2010 and that the 1^st and 2^nd interveners became directors and shareholders on the 6 December 2010. As can be seen from the above e-mail, 23 days later, on the 29 December, the 2^nd intervener sent an e-mail to the wife trying to facilitate an agreement.

45. It should also be noted that the so called attack on the husband that led to him deciding in part to give away his business took place on the 30 December 2010 – which was AFTER G had been incorporated and the directors and shareholders appointed. The husband’s explanation simply does not stand up to detailed scrutiny.

46. Neither does the suggestion that he simply gave away the companies free of charge because he didn’t care about money and was a “hippy at heart”. If the husband did not care about money he would not have taken HK$3 million out of the companies prior to the transfer.

47. It was also clear, having seen the 2^nd intervener in the witness box, that she has very little business acumen of her own. She knew very little about the internal workings of the companies and seemed content to leave everything to the business administrator. She was clearly very fond of her brother and most probably wanted to assist him. She is also quite elderly. The trial must have been a tremendous ordeal for her. I accept that

The irresistible inference is that it was open knowledge of the Husband’s family that they were going through a divorce at that time. The Husband’s family was actively making negotiations with the Wife on the financial provisions for her and the son on behalf of the Husband. In the absence of cogent explanation, this provides solid ground for drawing the inference that they knew or ought to have known that the reason behind the allotments and the dispositions, made contemporaneously, was to defeat the Wife’s claims for ancillary relief.

I accept that to be the case.

Conclusion

48. Consequently I will make an order in the terms that the wife seeks as follows:

(a) the allotment of 90,000 shares in P to G made on 14.2.2011 be set aside;

(b) the allotment of 90,000 shares in C to G made on 14.2.2011 be set aside;

(c) the disposition of the Husband’s 10,000 shares in T to G made on 25.1.2011 be set aside;

(d) the disposition of the Husband’s 10,000 shares in P to G made on 18.2.2011 be set aside;

(e) the disposition of the Husband’s 10,000 shares in C to G made on 18.2.2011 be set aside;

(f) the 1^st Intervener and the 2^nd Intervener and each of them do take all necessary steps and execute all necessary documents to re-vest all the shares in P, C and T now held in G back to the Husband within 14 days from the date of the order made herein;

(g) pending full compliance of the aforesaid orders / directions, the Husband and Interveners whether by themselves, their servants or agents be restrained from making transfers dispositions or otherwise cause any dilution or changes in values of the shares or in relation to the underlying assets of G, P, C and T;

(h) pending full compliance of the aforesaid orders / directions, paragraph 1 of the Order of HHJ Melloy dated 9.1.2012 do continue;

(i) there be liberty to apply on the implementation of the order.

Costs

49. Given my findings I am of the view that a costs order should be made that accurately reflects my concerns about the husband’s litigation conduct. Therefore I will make an order nisi to be made absolute in 14 days time that the husband do pay the wife’s costs on an indemnity basis, to be taxed if not agreed. There shall be certificate for counsel.