WAN MUN POR v. YUEN TIP CHUK

HCMP 274/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 274 OF 2007

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BETWEEN

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J U D G M E N T

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Introduction

1.   The plaintiff commenced this action in February 2007 seeking in gist an order that the net proceeds from the sale of what in effect was the parties former matrimonial home be equally shared by him and the defendant. The plaintiff is legally still the defendant s husband. But it is undisputed the parties have been living apart since at least about 2001. The plaintiff also testified that he already commenced divorce proceedings in the Family Court.

2.   The amount in question is about $1.68 million and is currently held by the mortgagee bank pending the determination of this action.

3.   The claim is denied by the defendant, who asserts that she is the sole beneficiary of the net sale proceeds in essence because the parties agreed in 2001 that the plaintiff s interest was to be transferred to her.

4.   This action is based on s. 6, Married Persons Status Ordinance (Cap. 182) which stipulates:-

In any question between husband and wife as to the title to or possession of property the husband or the wife may apply by summons or otherwise in a summary way to a judge to determine the question (s. 6(1));

On any such application the judge may make such order with respect to the property in dispute and as to the costs of and consequent on the application as he thinks fit, or may direct such application to stand over and any inquiry touching the matters in question to be made in such manner as he thinks fit (s. 6(2)).

Background Facts

5.   The following facts are undisputed.

6.   The parties were married in November 1983. The plaintiff used to work as a taxi driver while the defendant was a housewife. Since about 1989, he started a trading business engaged mainly in importing goods into the Mainland. Although the precise extent is disputed, it is common ground the defendant helped out the plaintiff s business. In the plaintiff s own words:-

The defendant was a housewife and sometimes helped me out as my assistant in my business Since about 2000, I intended to explore more businesses in China mainland. So I left the management of the firm s business to the defendant The daily operation of my firm was thus left to the defendant. Business was not good then so my firm ceased trading [in November 2004]. But the defendant continued to operate the business left over by my firm. I have not participated in the business of the defendant (para. 8, plaintiff s witness statement).

What happened to the business operated by the plaintiff from 2001 to 2004 will be further discussed below.

7.   The suit property was a flat and a carparking space in Grandeur Villa, Kowloon Tong. It was purchased in the parties joint-name in 1991 and was intended to be the matrimonial home. The purchase was partly financed by a mortgage loan.

8.   The plaintiff wrote and signed a Chinese document dated September 2001 which reads:-

“ 要求証明書

(1) 玆有我尹滿波要求袁叠足幫我還給我母親人民幣壹拾伍萬元。另給成港幣伍拾萬元正。

(2) 我願意將香港住家轉名給袁叠足名下所有。

(3) 到香港指定律師樓辦離婚手續。律師費由袁叠足付。”

This document ( the 2001 document ) naturally forms the backbone of the defendant s case.

9.   The plaintiff left Hong Kong for Peru to start his business there. He returned to Hong Kong in 2004 after his business failed.

10.   Two sons were born out of the wedlock. The elder one was born in August 1991 while the younger one was born in June 1993. They were taken care of by the defendant (or her relatives) since 2001 until her arrest. At the time of trial, both sons lived in Canada, being taken care by the defendant s relatives.

11.   The defendant was arrested in the Mainland in April 2004. She was sentenced to 15 years imprisonment in December 2005.

12.   Since about March 2005, there was default in the repayment of the mortgage loan. The suit property was re-possessed by the mortgage bank and later sold in September 2005.

Credibility and Findings of Fact

13.   Only the plaintiff testified at trial. Because the defendant was serving her term of imprisonment in the Mainland, she could not appear in court. However, after various attempts, her solicitors finally managed to obtain a Chinese statement dated 19 February 2008 from her. This statement was adduced as a piece of hearsay evidence at trial.

14.   In short, for the reasons set out below, I do not find the plaintiff to be a credible witness.

15.   The defendant s statement was served on the plaintiff in February 2008. Despite a time period of about 15 months between then and the date of hearing, the plaintiff did not adduce any evidence to refute the defendant s case that she had made payment in accordance with the 2001 document.

16.   During his cross-examination, the plaintiff said this:-

(a) although he accepted the defendant had provided help to his business since the beginning, the defendant had been taking away money from the business since 1989. He did not stop her because he was concerned with the family and he was not a person overly concerned with money;

(b) it is true the 2001 document was written by him, but it was only a document prepared for the purpose of enticing the defendant to come out from hiding to meet him;

(c) the defendant never made any payment in accordance with the 2001 document.

17.   The reasons given by the plaintiff for not taking any action against the defendant for the alleged removal of funds are incredible. Not only did the plaintiff fail to take any action, he decided to leave Hong Kong for Peru in 2001, effectively leaving behind him the Hong Kong business, the suit property and the two sons. All these have to be, and were, taken care of by the defendant. The reasonable inference from such acts is that he was giving up whatever interest he may have in Hong Kong. However, in the context of this action, such an inference does not need to go beyond his interest in the suit property.

18.   For the same reasons, I do not believe the plaintiff s claim concerning the purpose for preparing the 2001 document, or his claim that no payment has been made by the defendant.

19.   On the contrary, I am satisfied from the totality of the evidence that the 2001 document evidences the parties agreement, and that the defendant has performed her obligations set out in the 2001 document.

20.   In this connection, I have taken into account the part of the plaintiff s cross examination where he said in essence the following: in 2001, the defendant promised him that she would continue to repay the debt(s) (the plaintiff has not clarified whether he was referring to the business debt(s), the mortgage loan or some other debt(s)), and to allow the sons to study in Canada. It was only because of these that he agreed to this matter ( ؼ ). The plaintiff testified further that, although the defendant has been repaying the debt(s), she stopped to do so after her arrest.

21.   When the plaintiff was queried during trial what he meant by:-

"he agreed to this matter" ,

he replied he did not agree to anything else .

22.   I consider the above testimony to be an indirect admission that the 2001 document evidences an agreement between the parties.

23.   Although it is not crucial to the assessment of the plaintiff s credibility, the timing of this action and the pending divorce proceeding shows that this action was commenced probably because the plaintiff wanted to go back on the 2001 document. This action was commenced in February 2007 whereas the divorce proceeding was commenced in June 2007 (FCMC 7070/2007). The plaintiff admitted that he learnt of the default in the repayment of the mortgage loan in 2005. In addition, he must have known of the defendant s incarceration because he testified during her trial in the Mainland in 2005.

24.   In view of the above, I consider it appropriate to give weight to the defendant s Chinese statement although:-

(1) she has not been subjected to cross-examination;

(2) the statement was not made under oath;

(3) there is no documentary evidence to support her claim that payments have been made in accordance with the 2001 document.

25.   According to her, the parties relationship turned bad when she found out the plaintiff has had an affair with a Mainland female. The plaintiff asked for, and she agreed to, a divorce and the parties properties to be separated. She gave $100,000 to the plaintiff before he left for Peru. Although the 2001 document does not expressly state so, the custody of the sons was given to the defendant. The defendant paid RMB300,000 to the plaintiff s mother in 2002. Further, in 2002 and 2003, the defendant paid the plaintiff $500,000. The defendant continued to run the Hong Kong business and repay the mortgage loan until her arrest. The sons studied in Canada and have been taken care of by the defendant s brother.

26.   Accordingly, I find as a fact the plaintiff s interest in the suit property has been transferred to the defendant and vested in her since September 2001.

Conclusion

27.   By reason of the above, the plaintiff s claim is dismissed.

28.   Further, the defendant claims that an order ought to be made in her favour should the court accept her case. The plaintiff has not raised objection to this course being taken.

29.   I consider it appropriate to accede to the defendant s claim. Accordingly, the parties are to attempt to agree on the precise terms of an order to be made in the defendant s favour within 14 days from the date of this judgment. Failing agreement, the parties are to submit for the court s approval their respective draft orders within 7 days from the expiration of the said period or the date of their failure to agree (whichever is the earlier) (with reasons in support if they consider it necessary to put forth any such reasons).

Other Matters

30.   As stated above, the suit property has been sold in September 2005. Hence, it ceased to be in the parties possession by that date at the latest.

31.   The court s jurisdiction to deal with the net sale proceeds (despite the sale of the suit property) has not been disputed by either party. It appears I have jurisdiction to do so taking into account the following legal propositions:-

(a) the word property in the statute can include a chose in action: Rayden & Jackson on Divorce and Family Matters (2005) 18^th Ed., Vol. 1(1), para. 24.7, text to n. 7;

(b) it is unnecessary for the property to be still in the possession of either of the spouses or for there to be an identifiable fund in existence: Rayden & Jackson, Vol. 1, para. 24.7, text to n. 9.

See also s. 7, Cap. 182.

32.   Further, as mentioned above, the plaintiff has commenced a divorce proceeding in June 2007. Despite that, it does not appear the said proceeding is actively pursued.

33.   In any event, the parties do not consider it to be relevant to this action, even though they have expressly been asked to consider this aspect. The defendant has once argued that the court should suspend the enforcement of any order to be made herein if such order were in the plaintiff s favour. But even that argument does not cover the said proceeding. Since I concluded essentially in her favour, the defendant s said argument becomes academic. The plaintiff considers it unnecessary to advance any further argument in this regard.

Costs Order

34.   The parties agree costs should follow the event. There will accordingly be a costs order that the costs of this action (including any reserved costs) be paid by the plaintiff to the defendant to be taxed if not agreed.