FKY v. HCYP AND ANOTHER

FCMC 1480/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 1480 OF 2011

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J U D G M E N T

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1.  This is an application by the Petitioner (“the wife”) against the 1^st Respondent (“the husband”) and the 2^nd Respondent (“the husband’s mother”) under s.17 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”) for an avoidance of disposition order (“the s.17 application”).

Brief History

2.  The parties were married in 2006.

3.  They had no children from the marriage.

4.  The parties separated in about June 2009.

5.  On 1 February 2011, the wife issued a petition for divorce based on 1-year separation with consent.  A decree nisi of divorce was granted on 6 May 2011, which was later turned into a decree absolute on 27 June 2011.

6.  For the issue of ancillary relief, the parties reached an agreement and the court made the following orders by consent on 6 May 2011:

(1)   The husband shall pay a lump sum of $1,000,000 within 5 years of the decree absolute (“the lump sum order”); and

(2)   The husband shall transfer certain publicly listed shares to the wife upon the granting of decree absolute.

7.  It is the wife’s case that the husband has complied with the order on transfer of shares but not the payment of the lump sum of $1,000,000 when such payment was due on 27 June 2016.  When the wife tried to enforce the said lump sum order by way of charging order on a property situated at Flat C on 12^th Floor Ching Tak Building 260-264 Des Voeux Road West Hong Kong (“the Property”) which was previously owned by the husband and the husband’s mother jointly, it was found that the husband has already on 8 July 2015 transferred all his title and interest in the Property to the husband’s mother.  The wife views this as a disposition to defeat the lump sum order, she therefore issued the present summons asking for an avoidance of disposition order under s.17 of the MPPO.

8.  On 15 February 2017, this court granted an order joining the husband’s mother as the 2^nd Respondent with further directions on service and that the two respondents to file and serve their affirmations in opposition, if any, within 14 days. 

9.  On 31 March 2017, solicitors for the wife filed an affirmation proving proper service being effected on the husband and the husband’s mother.   As they have not filed any affirmation in opposition and failed to appear at today’s trial, I have decided to proceed with the trial in their absence.

The Law

10.  The wife is now relying on s.17(1)(c) of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) in her setting aside application:

“(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) if it is satisfied that the other party is, with the intention of defeating the claim for financial provision, ---;

(b) if 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 the disposition 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.”

11.  From the said provisions, the court shall have power to set aside a disposition if it is satisfied that the other party has made such a disposition with the intention to defeat a financial order obtained by the applicant.  If the disposition was made within 3 years prior to the application and has had the consequence of defeating the applicant’s claim for financial provision, there is a rebuttable presumption that the disposition has such an intention to defeat the applicant’s claim.

Discussion

12.  It is clear from the facts of this case that the wife has obtained a financial order against the husband for the sum of $1,000,000.   The husband has breached the said order by failing to pay the said sum on 27 June 2016. 

13.  From the land search record, the husband and the husband’s mother purchased the Property on 31 October 2001 as joint tenants at a consideration of $580,000.   They held the Property in the same capacity until 8 July 2015, when the husband transferred all his title and interest therein to the husband’s mother at a consideration of $3,000,000.  

14.  In deciding this application, the court has to consider 2 issues:

(1)   Whether the said transfer has the consequence of defeating the wife’s claim for financial provision.

(2)   Whether the husband had the intention of defeating the wife’s claim for financial provision in making the said transfer.

15.  The most effective way to enforce the lump sum order is to apply for a charging order on the beneficial interest of the husband in the Property.  By transferring all his title and interest in the Property to the husband’s mother, it must have the consequence of defeating the wife’s claim for financial provision.  The answer to sub-paragraph (1) in §14 above must be in the affirmative.

16.  This application for an avoidance of disposition order was made on 24 June 2016.   The transfer was made on 8 July 2015 and was therefore within a period of 3 years prior to the application.  The presumption under s.17 (3) of MPPO applies.  There is no evidence from the husband or the husband’s mother to rebut the said presumption.   Therefore, I am satisfied that the husband had the intention to defeat the wife’s claim for financial provision when he transferred all his title and interest in the Property to the husband’s mother.

17.  Under these circumstances, s.17 (1)(c) of MPPO applies and I make an order that the Assignment dated 8 July 2015 between the husband and the husband’s mother as vendors on the one part and the husband’s mother as purchaser on the other part registered in the Land Registry with memorial number 15072900140554 concerning the Property to be set aside.

Costs

18.  Costs to follow event.  The wife succeeded in this application and shall have costs including all costs reserved.   Upon reading the wife’s Statement of Costs for Summary Assessment, I summarily assess the costs payable by the 1^st and 2^nd Respondents at $60,000.