LWC v. ACWD

FCMC 3735/2016

[2019] HKFC 293

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 3735 OF 2016

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D E C I S I O N

(Variation of Consent Order)

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Background

1.  On 28 June 2018 the Petitioner Wife (“W”) and the Respondent Husband (“H”) reached global settlement on ancillary reliefs in these

proceedings. The terms of settlement were recorded in a Consent Summons dated 28 June 2018 (“CS”) written in Chinese.

2.  As H was legally represented, the CS was drafted by H’s lawyers and signed by W. There is also a separate sheet (in English and Chinese) attached to the CS containing the express acknowledgement by W that she had been suggested to seek independent legal advice on the contents and legal effect of the CS.

3.  The CS contains, inter alia, terms as to the disposal of the former matrimonial home (“FMH”) and the distribution of the net proceeds of sale thereof including, inter alia, monetary provisions to cater for the needs of the child of the family who has yet to complete his tertiary education. It also contains the parties’ abandonment of their respective rights on ancillary reliefs against the other party upon compliance of the terms therein.

4.  On 4 July 2018, the Court granted an order in terms of the CS (“Consent Order”).

5.  On 15 April 2019, W acting in person issued a Summons seeking “amendment (修正)” of a number of paragraphs of the Consent Order. W also filed a supporting affirmation together with exhibits. W’s Summons was scheduled for hearing on 27 May 2019.

6.  On 8 May 2019, W instructed Messrs. Lee Wong & Co. to represent her.

7.  At the call over hearing on 27 May 2019, Miss Wong for W sought to amend the Summons by deleting a number of paragraphs therein and restricting only to the following paragraphs :-

“1. 將P.2 E (i) 修正為

呈請人及答辯人須於兒子完成 DSE考試中六課程後才遷出或出售，即約2020年 7月後將婚姻居所以可獲得的最高市場價格遷出或出售，但該出售之價值不能少於呈請人與答辯人已同意之估值即港幣$7,900,000。

4. 將P.5 (1) (a)(b)(c) 修正為

(a) 在未售出婚姻居所前，由2019年1月1日開始至兒子完成中五課程學年的8月31日為止，每月1號支付港幣$11,000之一半，即港幣$5,500元作為兒子之生活費用，該款項須由答辯人直接存入呈請人之銀行户口，即渣打銀行戶口號碼407-xxxxx51-2; 如已出售婚姻居所，該聯名戶口啟用後之即月開始至兒子完成中五課程學年的8月31日為止，每月1號支付港幣$11,000存入兒子銀行戶口，作為兒子之生活費用;

(b) 在未售出婚姻居所前，由兒子開始入讀中六的9月1日起至完成中六課程學年的8月31日為止，每月1號支付港幣$13,000之一半，即港幣$6,500元作為兒子之生活費用，該款項須由答辯人直接存入呈請人之銀行户口，即渣打銀行戶口號碼407-xxxxx51-2; ; 如已出售婚姻居所，該聯名戶口啟用後之即月開始至兒子完成中六課程學年的8月31日為止，每月1號支付港幣$13,000存入兒子銀行戶口，作為兒子之生活費用;

(c) 在未售出婚姻居所前，由兒子開始入讀大專院校的9月1日起至完成大專院校課程學年的8月31日為止，每月1號支付港幣$15,000之一半，即港幣$7,500元作為兒子之生活費用，該款項須由答辯人直接存入呈請人之銀行户口，即渣打銀行戶口號碼407-xxxxx51-2; ; 如已出售婚姻居所，該聯名戶口啟用後之即月開始至兒子完成大專院校課程學年的8月31日為止，每月1號支付港幣$15,000存入兒子銀行戶口，作為兒子之生活費用”

8.  Thus, W’s Summons as amended focus upon 2 aspects, namely :-

(a) the undertaking relating to delaying the time for sale of the FMH contained in the preamble of the Consent Order from “before December 2018 (“2018年12月前”)” to “after the child completed DSE Form 6 examination (“兒子完成 DSE考試中六課程後”); and

(b) additional maintenance provisions for the child of the family preceding the sale of the FMH which had not been provided for in the Consent Order.

W’s grounds of application

9.  W filed her Affirmation in support of the application[1].

10.  W’s grounds of application can be summarised as follows :-

-  she has a history of depression[2];

-  she was in an unsettled state of mind due to influence by medication whereas H was legally represented[3];

-  she had tried to put the FMH for sale in the open market through estate agents[4] but unsuccessful due to unsatisfactory market condition;

-  the child will be studying Form 6 in September 2019,   taking the DSE examination in early 2020, both the child and herself have mental problems and any moving out from FMH need time and require adaptation to the new living environment[5];

-  at the time of signing the CS, her mental condition was about to collapse due to worries over the child’s mental condition, she was also under the influence of medication[6]

-  she did not have legal representation[7];

-  she had applied for legal aid twice but was refused because she had insurance savings policies and MPF[8].

H’s grounds of opposition

11.  H in his 3^rd Affirmation[9] sets out the chronology of events leading to the signing of the CS on 28 June 2018. There were 2 Financial

Dispute Resolution (“FDR”) hearings in this Court on 1 December 2017 and 9 March 2018. Parties then engaged in 4 rounds of mediation on 13, 17

and 24 April and 10 May 2018 which lasted for about 9 hours. A mediation agreement in Chinese was eventually signed on 19 May 2018.

12.  H’s lawyers drafted the CS in Chinese embodying the terms which had been agreed by the parties recorded in the mediation agreement for their signing. Within the CS, W had been duly reminded of her right to seek independent legal advice of the contents and legal effect of the CS before signing it. W signed on 28 June 2018 and apparently meticulously enough to also initial at the bottom right hand corner of each page.

13.  Thus, it is H’s case that W was fully aware of the terms of settlement which were agreed after lengthy process of active mediation with the assistance of mediator. The CS was signed by W with the knowledge and acknowledgement of her rights to seek independent legal advice before doing so.

14.  It is also H’s case that W is now seeking to “re-write” the terms of settlement rather than seeking variation of the agreed terms and/or directions from this Court for implementation of it.

What is W actually seeking ?

15.  The first question to ask is whether W is now seeking variation of the Consent Order which normally would only be considered by the Court

when there are substantial and material change in circumstances, which are not foreseeable at the time of the agreement leading to signing of the CS, and which had rendered implementation not feasible.

16.  Whether the terms of the Consent Order require intervention of the Court before they could be implemented ?

Discussion

17.  It is not uncommon for settlement terms in ancillary reliefs to take the form of undertakings when there are no specific statutory provisions empowering the Court to make immediate orders on those terms where the parties had nonetheless agreed to form part of their settlement. A classic example would be terms covering performance or prohibition of certain acts or making future payments not yet due.

18.  Paragraph E (i) of the Consent Order embodied the parties’ consensus of selling the FMH before December 2018 (which is 6 months after the CS was signed) at the highest market price that could be obtained. Such consensus necessarily takes the form of undertakings pre-requisite to other terms which the parties had agreed. In such context, the consequence that follows, being the immediate need to distribute the net proceeds of sale of the FMH which the parties had agreed, was embodied in Paragraphs 1(a) (b) and (c) of the Consent Order.

Aspect 1 : Delaying the sale

19.  The reasons given for seeking delay in the sale of the FMH was to enable the child to complete his DSE examination in early 2020; not to cause much disturbance to the child who also suffered some mental problem. Moreover, the property market was not satisfactory despite her effort to put

the FMH up for sale through estate agents. Meanwhile, W also had not been able to find suitable accommodation.

20.  In my decision, none of the reasons about the son having to take the DSE examination and his mental problem are material change in circumstances arising after the Consent Order. Quite contrary, it is W’s own case that she and the son has had history of mental problem prior to the Consent Order. The proximity of the son’s DSE examination is also something foreseeable and within contemplation at the time of the CS.

21.  As to W’s lack of legal representation, this is not an acceptable explanation but an excuse. She had expressly acknowledged of being suggested to seek legal advice on the contents and legal effect of the CS but she decided not to do so. She would only have herself to blame rather than putting this up as a ground for variation.

22.  As to W’s condition being unstable and/or being influenced by medication at the time of signing the CS, there is no cogent medical evidence in support that this is the case. Bare allegation based upon historic sporadic records of mental problem is not sufficient, medical evidence such as reports of her mental condition at or around the time of signing the CS is needed.

23.  W in her supporting affirmation produced exhibits “LWC-8(A)- (E)” containing 5 letters of appointment of the 4 major estate agents in Hong Kong to put the FMH up for sale. She also produced exhibit “LWC-8(F)” containing photocopies of business cards of different estate agents allegedly had attended the FMH with prospective buyers for viewing.

24.  Upon close review of the said letters of appointment, it is noted that 4 out of 5 letters bore the same date of 6 April 2019, which is just 8 days

before she issued the present Summons for variation. Also, the date of 6 April 2019 is already 4 months after (my emphasis) the original agreed date of sale of before December 2018 in the Consent Order. Apart from the date was all the same in the 4 letters, the proposed selling price was all set at $8,600,000. No explanation was provided by W as to why she appointed the estate agents 4 months after (my emphasis) the agreed date of sale. The only reasonable inference to be drawn is that these 4 appointment letters were signed in order to pose the scene of her “endeavour” to sell which in fact is not the case.

25.  As to the other appointment letter which bears the date of 21 June 2018 (that is before December 2018), it was noted that the proposed selling price was set at $9,800,000, which is $1,900,000 higher than the bottom price of $7,900,000 for sale as agreed by the parties at Paragraph (E) (i) of the Consent Order. Although this 2018 appointment letter was dated 21 June, which is 2 weeks before the Consent Order, W had not provided any explanation as to why she did not adjust the proposed selling price down to the bottom price of $7,900,000 in order to facilitate and expedite the sale.

26.  In my decision, W failure to adjust the original proposed selling price of $9,800,000 down to the agreed bottom price of $7,900,000 is indicative of W not being conscientious in selling the FMH. I firmly believe the bottom price of $7,900,000 agreed to by the parties was not arrived at in abstract but by reference to the average prevailing market price

at the time. Thus, I am minded to say setting a selling price of $1,900,000 higher than the average prevailing market price not only deter prospective buyers, the estate agents may even not keen and aggressive to introduce the

FMH to prospective buyers. Having said, W’s contention of unable to sell the FMH due to unsatisfactory market condition completely falls apart. W’s case of unable to sell the FMH and therefore need to delay the sale is a sham.

27.  W failed in showing that there was substantial and material change in circumstances to support her variation application of the Consent Order. Accordingly, I dismiss W’s application of Paragraph E (i) of the Consent Order.

Aspect 2 : Additional financial provisions

28.  W’s intended variation of Paragraph 1(a), (b) and (c) is a corollary application to her intended variation of Paragraph E (i) to delay the sale of the FMH. Since I have dismissed her variation of Paragraph E (i), this part of the variation also fails. The time for sale of the FMH had long passed and should be proceeded forthwith. There is no issue of financial provisions before (my emphasis) sale of the FMH.

29.  Suffice to say is that W is attempting to include completely “new/additional” financial provisions under the disguise of necessity to protect the best interests/welfare of the child. In my decision, the Consent Order already contained comprehensive financial arrangements for the child out of the net proceeds of sale under Paragraph E (iii)(b), Paragraphs 1(a), (b), (c) and 2. Given the time engaged in the FDRs and mediation, coupled with the comprehensive terms of the CS, I am satisfied that the parties had given full consideration to cater for the best interests/welfare of the child when arriving at the terms of the CS. W’s contention of variation to cater for the child’s best interests/welfare is a non-starter and bound to fail.

30.  Accordingly, I find W’s application to vary Paragraphs 1(a), (b) and (c) of the Consent Order fails.

Court’s intervention is required for implementation ?

31.  As Mr. Leung for H rightly submitted, putting W’s case to the highest that the FMH could not be sold in open market before December 2018, there is already an agreed mechanism[10] of sale by way of auction.

32.  There is not even a requirement to seek the Court’s directions on alternative mode of sale as it had already been provided for in the terms of the Consent Order.

Cases and Authorities

33.  W’s Counsel Mr. Dexter Leung cited a number of cases and authorities such as CCMJ v. SSM [2016] HKFLR 65, GM-SA v. DDPJ [2019] 1 HKC 543, Birch v. Birch [2017] 1 WLR 2959, A v.A [2018] 4 WLR 66, AEM v. VFM [2008] 3 HKLRD 36, Wong Oi Han v. Sin Wai Cheung [2012] 3 HKLRD 142, TPF v. W [2019] HKFC 19 and L v. C unreported, FCMC No.5952/2012.

34.  Given my decision that W had failed completely to substantiate a case for variation of the Consent Order, I do not intend to go into each of

these cases. The legal principles therein cover the Court’s jurisdiction in variation of consent orders and discharge/modification of undertakings are well settled and not disputed by Mr. Leung for H. What is actually disputed by H is that W attempted to “re-write” the settlement terms already embodied in the Consent Order. Any such attempt should only be made either by way of an appeal or fresh proceedings[11].

35.  It is also disputed by H that any further delay in the sale of the FMH also delayed H from receiving the agreed share of proceeds of sale which would cause prejudice to H. I agree.

Conclusion

36.  For all the above reasons, I find W failed in her Amended Summons for variation of the Consent Order.

37.  W’s Amended Summons dated 15 April 2019 must be dismissed.

Costs

38.  Since W had failed in her application completely, I find it fair and reasonable that H should have the costs of and occasioned by this application, including all costs reserved, to be taxed if not agreed. H’s own costs be taxed in accordance with Legal Aid Regulations.

The way forward

39.  The time for sale of the FMH had long expired.

40.  I am minded to endorse a penal notice on the terms of the Order dated 4 July 2018. I am confided that W’s lawyers would fully advise their client on the meaning and implication of the penal notice.

Orders

41.  I now grant the following Orders :-

(a)  The Petitioner’s (W’s) Amended Summons dated 15 April 2019 be dismissed;

(b)  The Petitioner (W) do pay to the Respondent (H) the costs of and occasioned by the Amended Summons dated 15 April 2019, including all costs reserved, to be taxed if not agreed;

(c)  The Respondent’s (H’s) own costs be taxed in accordance with Legal Aid Regulations;

(d)  Penal Notice be endorsed on the Order dated 4 July 2018;

(e)  Service of the Order dated 4 July 2018 (with penal notice endorsed) be effected upon the Solicitors for the Petitioner Messrs. Lee Wong & Co.

42.  This is a costs order nisi which will become absolute if no application is made by either party within 14 days from the date of this Decision.

[1] TB : pages 8 to 22

[2] TB : page 12 (paragraph 14)

[3] TB : page 13 (paragraph 16)

[4] TB : page 14 (paragraph 17)

[5] TB : page 15 (paragraph 18)

[6] TB : page 16 (paragraph 21)

[7] TB : page 17 (paragraph 22)

[8] TB : page 17 (paragraph 23)

[9] TB : pages 31 to 35

[10] See Paragraph E(i) of the Consent Order

[11] See WTOL v. WYPP, unreported CACV 241 of 2011