AD (also known as AT) v. RT

HCMC 1/2022

[2025] HKCFI 3846

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MATRIMONIAL CAUSES NO 1 OF 2022

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____________________

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JUDGMENT

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A.   INTRODUCTION

1.  This is the Judgment of the trial of the petitioner wife (“W”)’s application for ancillary relief and of her summonses which raise issues on the beneficial interest of:

(1)                  (“WIRE LTD”);

(2)  A flat situated in Yuen Long (“the 12D Flat”)[1];

(3)                                  (“BSP Limited”);

(4)                                        (“SWYP”)[2].

B.   BACKGROUND

B1.  Basic family background

2.  The respondent husband (“H”) and W were aged 42 and 38 respectively at the time of the trial.  Both parties were born and raised in India.

3.  H is the eldest of three siblings.  The 1^st intervener is his younger sister (“Sister”), and the 2^nd intervener is his younger brother (“Brother”).  The 3 siblings moved to Hong Kong in around 2002.

4.  H and W married in April 2012 in India, and they separated in around 2020.

5.  After the parties got married, W relocated to Hong Kong and lived with H’s family as part of a 3,000 sq ft multi-generational household located in the New Territories (“the Matrimonial Home”). The Matrimonial Home is owned by W’s father-in-law/H’s father (“Father”).

6.  There is one child of the marriage, a girl born in 2013 (now aged 11) (“Daughter”).  Pursuant to an order dated 15 September 2021, W was granted sole custody of Daughter.

7.  H’s mother (“Mother”), Sister and Brother subsequently left the Matrimonial Home.  Since then, Mother resides with H in a flat in the New Territories (“the 9A Flat”), while Father continues to reside in the Matrimonial Home with W and Daughter.

8.  Sister was married in India on 23 November 2017.  She lived with her husband in India until early 2018, when she returned to Hong Kong and lived in the Matrimonial Home.  She subsequently moved to live in the 12D Flat with her husband.

9.  Since October 2022, Sister has moved back to India.

B2.  Various companies

10.  H has been working in the money transfer industry since about 2003, when he joined Father’s business.  H subsequently started his own business in the same field.

11.  In around 2010 and 2011, H set up __________________________ (“GECL”) which was subsequently re-branded to be known as ______________________________________ (“HH HK”) and ______________________ (“GCLHK”).  There is no dispute that the shares in GCLHK and HH HK were initially held by Sister on behalf of H. 

12.  On 1 September 2013, Sister transferred 98.5% of the shares in HH HK back to H.  H accepted that the remaining 1.5% interest in

13.  When time went by, a number of subsidiary companies had been established under HH HK.

14.  HH HK is a licenced payment service provider in Hong Kong.  It, together with its subsidiaries, provides money remittance and foreign exchange services for businesses and individuals. 

15.  W joined HH HK in around April 2013, and worked there until April 2019.

16.  In 2019, HH HK spun off its cash transactions operation to WIRE LTD.

17.  WIRE LTD is a company incorporated in Hong Kong. It was formerly known as                              (“EMTL”), and only had its name changed to WIRE LTD in March 2019.  It is a licenced money service business provider.  Together with its subsidiaries (see below), WIRE LTD facilitates cross border payments, bank notes and foreign exchange transactions.

18.  It is undisputed that Sister is the 100% legal owner of

19.  H and Sister are the directors of WIRE LTD.

20.  WIRE LTD has had a number of subsidiary companies including:

(1)                    (“Wire Australia”);

(2)                            (“Wire Singapore”);

(3)  Wire Limited which was incorporated in New Zealand (“Wire NZ”).

21.  SWYP was incorporated in UAE on 1 April 2020. Brother is the registered owner of 43% shares in this company.

22. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (“STH LTD”) was set up by H in October 2019.  It was fully owned by H through XLTD (which is now known as BST)

23.  BSP Limited was incorporated in India on 19 November 2020.  Its shares are held by the 3^rd Intervener (who is H’s maternal uncle) (1%) and the 4^th Intervener (who is H’s best friend) (99%).

B3.  Family Loan Agreement

24.  On 14 March 2019, H and Sister entered into a Family Loan Agreement (“the Family Loan Agreement”) (witnessed by W) which provided, inter alia, that:

(1)  An interest-free loan in the sum of US$2,502,230 (“the Sister Principal Amount”) be provided by H to Sister for the purpose of investment in WIRE LTD;

(2)  The Sister Principal Amount shall be due and payable by Sister upon the expiry of 2 years from 14 March 2019;

(3)  If Sister fails to repay the amount due to H, H shall have the legal right to require the transfer of all shares in WIRE LTD held by Sister to himself;

(4)  No delay or omission on the part of H in the exercise of his right under the Family Loan Agreement shall be regarded as a waiver of any of his right.

25.  Sister and H then entered into a “Family Loan Extension Agreement” dated 8 March 2021 (“the 2021 Extension Agreement”), under which they agreed to extend the due date for the repayment of the Sister Principal Amount to 13 March 2023.  It was also agreed that all other terms and conditions of the Family Loan Agreement shall remain in full force and effect.

26.  By “Family Loan Extension Agreement-II” dated 17 December 2022 (“the 2022 Extension Agreement”), the said due date of repayment was further extended to 13 March 2024.

27.  By “Family Loan Extension Agreement-III” dated 8 March 2024 (“the 2024 Extension Agreement”), the loan repayment date was once again extended to 13 March 2025.

28.  The 2021 Extension Agreement, the 2022 Extension Agreement and the 2024 Extension Agreement will be collectively referred to as “the Extension Agreements” below.

29.  According to H, Sister had made a partial repayment of US$1,383,625.66 on 13 December 2023.

B4.  The 12D Flat

30.  The 12D Flat was purchased in around August 2018 under the sole name of Sister.

C.   THE ISSUES

31.  Parties have lodged an Agreed List of Issues, which apparently have been prepared with the well established principles as explained in LKW v DD (2010) 13 HKCFAR 537 in mind.

32.  Even though the 2 legal teams have disagreements on the wordings (and the inclusion) of a number of issues, I do not think they really differ a lot on the substantive issues which this Court has to resolve. Their disputes are mainly on how to phrase the issues and whether some of them should be subsumed under some other issues.

33.  I set out (and rearrange) the issues which will be considered by this Court in this Judgment as follows[3]:

(1)  Issues 1, 2 and 5[4] – Whether H or Sister is the beneficial owner of WIRE LTD and its subsidiaries (namely, Wire Australia, Wire NZ and Wire Singapore), and whether
WIRE LTD is a financial resource available to H;

(2)  Issue 3 – Whether the agreement(s) to extend the due date of the Family Loan Agreement should be set aside pursuant to section 17 of the Matrimonial Proceedings and Property Ordinance (Cap.192, Laws of Hong Kong) (“MPPO”) and/or be added back as H’s conduct which the Court should have regard;

(3)  Issue 4 – Whether H has transferred the family loan granted under the Family Loan Agreement to HH HK; if so, whether such a transfer should be “added back”;

(4)  Issues 6 and 7 – Whether H or Sister is the beneficial owner of the 12D Flat;

(5)  Issue 10 – Whether H has dissipated HK$4.75 million through SWYP, and whether such a sum should be “set aside” under section 17 of MPPO and/or added back;

(6)  Issues 11 and 12 – Whether H or the 3^rd / 4^th Intervener is/are the beneficial owner(s) of BSP Limited;

(7)  Issue 13 – Whether the total sum of INR51,635,727 (i.e. INR49,935,727 and INR1,700,000) (approximately HK$4,847,036) transferred to BSP Limited was dissipated by H and whether the same should be added back;

(8)  Issue 14 – Whether H has dissipated:

(a)  a sum of HK$3,545,000 as HH HK’s IT expenses for 2021; and

(b)  a sum of HK$3,950,000 as HH HK’s marketing / branding expenses for 2021,

and whether such sums should be added back;

(9)  Issue 15 – Whether H has dissipated HK$4,750,000 through STH LTD, and whether such a sum should be added back;

(10)  Issue 17 – whether the following assets should be taken into account:

(a)  Judgment debt which MM owed H in relation to PIE in the amount of AED8,003,214.49 (HK$17,006,568.52);

(b)  Undisclosed jewellery and valuable personal items of W;

(11)  Issue 18 – What is the extent of H’s liabilities, taking into consideration the followings:

(a)  The purported loan from Mr JGS (which H claims to be HK$2,000,000);

(b)  The purported loan from NMG LTD (which H claims to be US$4,700,000, equivalent to HK$36,723,685);

(c)  The purported loan from Mr AK (which H claims to be AED$8,000,000, equivalent to HK$17,021,318.98);

(d)  The purported loan from HH HK (which H claims to be HK$8,538,789.25 as on 14 December 2023);

(e)  The purported liability from PIE to HH HK and H’s purported guarantee (which H claims to be HK$14,514,163.66);

(f)  The purported loans from Sister (which H claims to be $700,000), and whether the purported loans are soft loans;

(12)  Issue 19 – What is the extent of W’s liabilities, taking into consideration the followings:

(a)  The judgment debt owed to Standard Chartered Bank (Hong Kong) Limited pursuant to a final judgment on 1 August 2023 (including interest);

(b)  The outstanding legal fees to W’s former solicitors;

(c)  The purported loan granted by Father in the sum of HK$265,000;

(d)  The purported loan granted by W’s sister in the sum of HK$745,000;

(e)  The purported loan granted by W’s friend D in the sum of INR300,000 (approximately HK$30,000);

(f)  The purported loan granted by W’s friend SR in the sum of HK$5,000;

(g)  The purported loan granted by W’s friend SS in the sum of HK$45,000;

(h)  The purported loan granted by W’s brother SD in the sum of INR195,000 (approximately HK$18,269);

(i)  The outstanding legal fees in India in the sums of HK$21,079 and HK$7,026;

(13)  Issue 20 – Having considered all the above, what is the total value of the assets;

(14)  Issue 21 – The standard of living of the parties during the marriage;

(15)  Issue 22 – W’s needs;

(16)  Issue 23 – Daughter’s needs;

(17)  Issue 24 – H’s needs;

(18)  Issue 25 – W’s earning capacity;

(19)  Issue 26 – H’s earning capacity;

(20)  Issue 27 – Any other financial resources available to the parties;

(21)  Issue 29 – Is there any reason to depart from equal sharing;

(22)  Issue 31 – Whether HH HK is (i) a non-matrimonial asset; and (ii) derived from H’s sole endeavours and consequently; (iii) how much of the value of HH HK should be included in the pool of assets for division between the parties;

(23)  Issue 16 – Whether the Court should have regard to W’s conduct as per section 7 of MPPO as follows[5], and whether the same should be reflected in the parties’ division of assets or costs:

(a)  Malicious / defamatory emails against HH HK and H;

(b)  Disclosure of confidential documents and pleadings of these proceedings to third party without leave of the court;

(24)  Issue 28 – How should the family assets be divided to achieve a fair outcome;

(25)  Issue 32 – How should the Court approach the value of HH HK given its non-realisable, illiquid nature as a private company;

(26)  Issue 33 – Whether H is required to pay maintenance to W;

(27)  Issue 34 – Whether H is required to pay child maintenance to W.

D.   CREDIBILITY OF WITNESSES

34.  The principles for assessment of credibility and reliability of witnesses are trite (see, for example, Hu Lan v David Golden [2023] HKCFI 873 at [36]), and I do not think it is necessary to set out the matters to be considered in full here. 

35.  At this stage, I do not propose to discuss the credibility of all witnesses one by one.  If necessary, I will consider their individual evidence under separate issues below. 

36.  However, I would like to express my general view on the credibility of H and W. 

37.  I regret to say that the credibility of H is particularly a problem in the present case.  Although Ms Booth has tried to persuade this Court that H had not been able to recollect as well as before because of his medical condition, with greatest respect, that is not my impression of H.  To me, H had been very sharp throughout the time when he was sitting in the witness box.  He had been able to anticipate what W’s counsel was going to cross-examine him on, and gave his answers accordingly, in an attempt to avoid those forthcoming questions.  He was also more interested in trying not to give answers which W’s counsel was looking for than to tell this Court the truth in relation to what he had been asked.  The most vivid example that can be given is what H asked this Court in the course of his cross-examination:

“So, the problem that I am facing when he’s asking any question, it seems more like an English language test rather than a question. Because when he asks a question, I’m always very puzzled in thinking. Because even if I say yes, it serves his purpose. Even if I say no, it serves his purpose. So I’m always confused. So, is it okay if I am not able to understand the question, if I ask him one or two times, I can just straight away say I can't answer the question?”

(emphasis added)

38.  As this Court reminded him right away, what he should do was not to second-guess what purpose W’s counsel wanted to achieve, but to tell the truth and nothing but the truth.  Unfortunately, H apparently did not take heed of what the Court told him.

39.  From what I observed, H did not have any real difficulty in understanding the cross-examination questions.  He only used his “English ability” as an excuse.  Whenever he was cornered by W’s counsel to the extent that he did not know how to answer his questions so as to suit his own purpose, he would ask counsel to repeat the questions so as to buy more time to think what to say.

40.  In my view, all these are consistent with his attitude since the commencement of the divorce proceedings in the Family Court.  This can be seen from the messages which H sent shortly after those proceedings had begun.  Those messages were sent to       _ (“SSP”), the then Chief Operating Officer of HH HK, whom H still trusted at the time.  In those messages, H stated:

“we will only sign term sheet / to avoid increasing the valuation of the company / or i have to pay for valuation of the company in divorce / we need to keep it quiet / untill my divorce is finalised / once u r here will plan how to do it quietly” (sent from 8:43am to 8:45am on 4 May 2020)”

41.  Therefore, I find that, generally speaking, H is not a credible witness.  I would not accept his evidence lightly in the absence of documentary evidence in support.

42.  W was a better witness, and generally I think she is more reliable and credible than H.  However, she was not always truthful. The most obvious example is her evidence on the malicious emails[6].  I will come back to this later. 

43.  Having said the above, I do have to make it clear that even if a witness has not given truthful or reliable evidence on one matter, it does not necessarily mean that the evidence of such a witness on another matter must be equally untruthful or unreliable.  It is particularly important for this Court to bear this in mind in the present case, when so many issues have to be resolved.

E.   DISCUSSION

44.  Following the guidance given by the Court of Final Appeal in LKW v DD (supra), I would now firstly identify the assets of H and W.

E1.  Beneficial ownership of WIRE LTD (Issues 1, 2 and 5)

E1.1   W’s case

45.  It is W’s case that H is the beneficial owner of WIRE LTD.  Her case may be summarised as follows:

(1)  Before the inception of WIRE LTD, from around December 2010 to June 2012, H was sued as one of the defendants in a civil action at the Court of First Instance (“the HCA Action”).   The allegations against H included money laundering and fraud.  This resulted in the freezing of the bank account of a sole proprietorship owned by H. 

(2)  Knowing the risks that the HCA Action would affect his business and lead to freezing of related bank accounts, H set up WIRE LTD, HH HK and GCLHK, and arranged Sister to hold the shares thereof.

(3)  At that time, Sister was only around 20 – 21 years old.  She has all along been an employee of HH HK, working for H.

(4)  Since then, H has used his connections, experience and expertise to approach other countries for the purpose of setting up subsidiaries of WIRE LTD.

(5)  Sister never took part in any discussions and was never copied any emails involving important business decisions.  She just executed documents relating to WIRE LTD.

(6)  While WIRE LTD had paid large sums to H, Sister had never made any withdrawals from WIRE LTD.

(7)  Because of money laundering issues, banks are not comfortable dealing with bank notes which is the main business of WIRE LTD. Therefore, H restructured his business in such a way to avoid being seen on paper to be the shareholder of WIRE LTD.  The holding of the shares in WIRE LTD and HH HK was also designed to avoid any investigation of a possible conflict of interest as one financial company holding shares in another financial company.

(8)  H was initially the 100% shareholder of Wire NZ. The shares in Wire NZ were transferred subsequently to WIRE LTD.  Wire NZ was deregistered in New Zealand out of H’s attempt to conceal the true ownership thereof and to keep WIRE LTD out of the matrimonial pot.

E1.2  H’s case

46.  H maintained that WIRE LTD’s beneficial owner is Sister but not him.  In gist, it is his case that:

(1)  Sister is the ultimate owner and managing and controlling force of WIRE LTD.  Despite her young age at the material time, she has accrued experience over time and she had learnt from H.

(2)  Brother is an employee of WIRE LTD and assists with its day-to-day operation.

(3)  While it is undisputed that H has made use of his business connections and expertise to assist Sister, this is not an indication of any beneficial interest in WIRE LTD.

(4)  In September 2013, when the court proceedings against H were all resolved, only the shares of HH HK[7] and GCLHK were returned (by new share allotments) to H.  If WIRE LTD was indeed beneficially owned by H, Sister would have returned the shares in WIRE LTD to H at the same time, but she did not.

(5)  H had never been blacklisted by any bank as alleged by W.

(6)  H had never received any income or dividend from WIRE LTD.

(7)  Although there is a business relationship between HH HK and WIRE LTD, this does not have any bearing on beneficial ownership.

(8)  H had been made the registered shareholder of Wire NZ by mistake.

(9)  Wire NZ was de-registered upon the instruction of Sister and at the request of the New Zealand regulator as it never began operations. 

(10)  In any event, Wire NZ is 100% owned by WIRE LTD. It has never begun operation and has no value at all.

E1.3  Discussion

47.  The law is trite.  The starting position is that equity follows the law.  There is a presumption that the beneficial interest follows the legal interest.  The party who asserts that the beneficial interest of the property does not lie with the legal owner bears the burden of proving it.  In other words, in the present case, W has to prove positively that there was an agreement between H and Sister at the time of the incorporation of WIRE LTD that Sister would be holding the company for H.

48.  W’s difficulty in relation to this claim is that she cannot give direct evidence on the alleged agreement between Sister and H at the material time because W was not involved at all.  Indeed, she was yet to be introduced to H at the time.

49.  Be that as it may, it does not mean that W’s claim is bound to fail.  This Court should still take into account all the relevant matters, in particular, the contemporaneous conduct of H and Sister (especially before the time the relationship between H and W turned sour), when deciding the matter.  In this regard, I am of the view that the Court should bear the following matters in mind:

(1)  While some conducts, at first sight, may be reflective of the fact that there was a trust arrangement between H and Sister, such conducts may at the same time be consistent with there being no such trust arrangement.  The Court has to take a holistic view of the matter.

(2)  The conducts relied on by W are among members of the same family, and their relationship at the material time is nothing but very good.  In such a situation, the Court should bear in mind that it may not be right to apply a strict commercial standard when considering what can be inferred from such conducts.

50.  For the following reasons, I have come to the conclusion that W has failed to prove on the balance of probabilities that the beneficial interest in WIRE LTD is owned by H.

51.  First, the most forceful factor which this Court should place weight on is the fact that when Sister in effect transferred the legal ownership of HH HK and GCLHK back to H in around September 2013 (i.e. after the HCA Action was concluded), she did not do the same as far as WIRE LTD was concerned.  This is inconsistent with W’s whole case theory. There was no reason why WIRE LTD had to be treated differently if it was beneficially owned by H like the other 2 companies.  Insofar as there is any suggestion that H intended to distance himself from WIRE LTD, it cannot hold water at all because of the fact that H was a director of WIRE LTD.

52.  Second, although Sister’s evidence gave the impression that she did not know much about WIRE LTD’s business, for example, she had no business plan, she had not identified prospective customers, not considered revenue and expenses in the first year of operation, she could not recall the dates of some of the important company decisions, etc., I am of the view that these do not matter much because, after all, it cannot be disputed that Sister had to rely heavily on H in the running of WIRE LTD, and that does not necessarily mean that H is the beneficial owner thereof. Put it in another way, that is not enough to tilt the balance to such an extent that the Court could infer that H had beneficial ownership in WIRE LTD.

53.  Third, the same logic applies to W’s argument that Sister was not involved in major business decisions of WIRE LTD. 

54.  Fourth, if WIRE LTD did not belong beneficially to Sister, there was no need to register her as a director at all, and it can be seen that, as a director, she had signed numerous audited financial statements of WIRE LTD.  This step could have been avoided if she was not appointed as a director at all.  The question is: If the only function for Sister was to hold WIRE LTD on H’s behalf, why was it necessary to appoint Sister as a director at all? 

55.  Fifth, W relied on numerous messages between herself and H in an attempt to show that she had been involved in the rebranding and re-structuring of WIRE LTD in 2018.  Even if that is the case, I do not think that is inconsistent with Sister’s case that WIRE LTD is beneficially owned by her, because after all, this is a company owned by a member of the family.  Given the close relationship among the family members at the material time, it is not surprising that H had also involved W.

56.  Sixth, W submitted that H had clearly benefitted from keeping WIRE LTD in Sister’s name as it gave HH HK access to WIRE LTD’s DBS account with reduced risk.  I do not think this argument would assist W, because:

(1)  the service provided by WIRE LTD to HH HK came with a fee;

(2)  it is not surprising that different companies owned within the same family provide assistance to one another.  This does not mean that all family members have equitable interest in all those companies. 

57.  Seventh, I do not accept W’s argument that WIRE LTD did not receive the annual fee of $96,000 from HH HK until 2019, as such payments are supported by documentary evidence such as the account statements in 2017 and 2018, and WIRE LTD’s annual financial statements from 2016 onwards.  If H was the beneficial owner for both HH HK and WIRE LTD, there was no need for him to cause the annual financial statements to be prepared in such a way back in 2016.

58.  Eighth, W referred to the account opening form of EMTL and drew this Court’s attention to the fact that, on the form, 2 email addresses had been provided by H, and both email addresses (one of which was “re********@****.com.hk”), it was said, belonged to H.  It was therefore submitted that that shows that WIRE LTD was actually owned by H.  This argument is not accepted because it is noted that the domain name of both email addresses belong to GECL.  If both email addresses were exclusively used by H, there was no need for H to give 2 email addresses at all. 

59.  Ninth, W referred to an email dated 30 May 2013 issued under the name of H, and submitted that this email shows that H was the one using the email address of “re********@****.com.hk”. With respect, this argument is misconceived.  That email account was printed after the words “Remittance Query”.  That must be taken to mean that anyone who has query on remittance matters should send an email to that email account instead of to H directly.  If anything, that tends to suggest that H is not the person who is primarily responsible to answer messages sent to that email address.

60.  Tenth, it is not clear whether W maintains that H’s beneficial ownership in WIRE LTD is supported by his receipts of dividends from WIRE LTD, as this point was not made at all in W’s narrative affirmation nor in her closing submissions (but only in her reply submissions in response to the submissions made by Sister).  In any event, this allegation is not made out because it is not supported by the audited financial statements of WIRE LTD.   W submitted that H’s explanation on his receipts are not credible.  However, the rejection of H’s evidence in this regard does not mean that the Court is bound to accept W’s oral evidence as to the nature of the payments, which is unsupported by documentary evidence.

61.  W asked this Court to draw adverse inference against H for his failure to provide any contemporaneous documents as to the underlying purpose of the said payments to him.  However, W should at least have established a prima facie case in this regard before the Court may consider drawing such inference against H.  In my view, W has failed to do so.

62.  Eleventh, W also relied on the fact that Sister did not withdraw any money from WIRE LTD. However, as pointed out by Mr Leung appearing for Sister, she was not cross-examined on this aspect at all.  It is therefore unfair to Sister if this argument is allowed, given she has not been given any chance to explain in Court.

63.  Twelfth, W further submitted that H’s injection into WIRE LTD (US$2.5 million and HH HK’s banknotes business) only makes sense if WIRE LTD belongs to H.  However, given the fact that these companies are owned by members of the same family and the close relationship between H and Sister, I am of the view that one should not approach the matter from the angle of strict commercial sense.  Furthermore, it should be noted that W accepted in Court that the Family Loan Agreement reflects a genuine transaction and that H had indeed lent money to Sister accordingly.  That being so, there is actually no injection of funds by H into WIRE LTD.

64.  Thirteenth, the same logic applies to H’s grant of the US$2.5 million interest-free loan to Sister.  Strict commercial sense should not apply.

65.  Fourteenth, talking about the Family Loan Agreement, I am of the view that it supports H’s case that Sister is all along the beneficial owner of WIRE LTD.  This is because:

(1)  Under the Family Loan Agreement, it was provided that a loan of US$2,502,230 was granted by H to Sister for the purpose of “Investment in Business ([WIRE LTD])”.  If Sister was not the beneficial owner of WIRE LTD, there was no need for her to get a loan from H for the said purpose at all;

(2)  It was further provided by the Family Loan Agreement that “if [Sister] fails to repay the amount due to [H], [H] will have legal right to transfer all shares (100%) held by [Sister] in the business ([WIRE LTD]) in the name of [H] against the settlement of the outstanding loan”. Apparently, the shares in WIRE LTD have been used as security of the loan. This does not make sense at all if the beneficial owner of such shares was in fact H himself.

66.  It must be borne in mind that W had signed as a witness to the Family Loan Agreement and she also accepted in Court that this is a genuine transaction. 

67.  Fifteenth, W relied on H’s email to his consultant (RD) dated 22 April 2019, with his “proposed company structure” under a holding company, and in such a structure, he showed himself as the ultimate 100% shareholder of WIRE LTD.  H explained in Court that the email was sent after the Family Loan Agreement was made and at the material time he was considering the company structure in the event Sister could not repay the loan.  This explanation is consistent with the fact that Sister had indeed not repaid the Sister Principal Amount at the time.

68.  Sixteenth, W also relied on the fact that H was made director of the WIRE LTD’s subsidiaries in Singapore, Australia and New Zealand, and that he was also made the shareholder of Wire NZ.

69.  As far as directorship of those subsidiaries are concerned, I do not think any argument can be made out of it. As aforesaid, Sister had to rely on H in the management of WIRE LTD.  It is not surprising nor inconsistent at all for H to be named as a director of those companies.

70.  Perhaps more can be said in relation to the shareholding of Wire NZ.  H had denied that he was a shareholder as such.  On the other hand, Sister claimed that it was a mistake that H had been registered as a shareholder, and those shares had been transferred back to WIRE LTD subsequently.  These matters arouse concerns as to whether H and Sister had anything to hide.  Having said that, I do not agree that these matters, even if they are looked at together with the other arguments made by W, would be enough for the purpose of proving W’s case.  After all, an important matter which must be borne in mind is that Sister was all along the legal owner of WIRE LTD. Furthermore, Wire NZ had never commenced operation.

71.  Seventeenth, I have not lost sight of the fact that some of the evidence given by H is not credible at all.  For example:

(1)  H alleged in his 4^th Affirmation that he was not accused of money laundering in the HCA Action.  That must be untrue, as demonstrated by the Statement of Claim filed in the HCA Action against H and others;

(2)  H also alleged that he could not recall if there was a police investigation at the time.  That must also be incredible, because it is difficult to imagine that someone would ever forget that he had been investigated by the police in the past (unless he was always investigated by the police, which is not suggested to be the situation here);

(3)  H had also contradicted himself: He initially said that WIRE LTD was not operational until 2019, but then said WIRE LTD acted as a correspondent to clear local payments on behalf of HH HK prior to that.

72.  Be that as it may, I do not think W should be taken to have proved her case by successfully discrediting H on some matters. In this regard, it should be borne in mind that it is not for H to prove that he is not a beneficial owner of WIRE LTD. 

73.  Eighteenth, I should make it clear that little weight should be placed on Father’s evidence, as it is demonstrated that he was willing to give evidence for the purpose of boosting W’s case even though he did not have knowledge on the matter.  He had also tried to exaggerate his evidence.  For example:

(1)  While Father claimed in his Affirmation that H had convinced him to open various companies (in an attempt to establish that H would continue to oversee and manage those companies opened by Father and that WIRE LTD is in similar situation), Father confirmed in Court that he had in fact never opened any company for H;

(2)  While Father made certain assertions in his Affirmation as to what happened after his company WWF LTD was closed down in 2014, he admitted in Court that since he was having treatment in 2014, he did not know what happened to the companies at the time;

(3)  While he alleged in his Affirmation that H circumvented regulations or compliance obligations by avoiding to be named as a shareholder (such as in the case of WIRE LTD), he could not name any such regulations or obligations in Court, and admitted that he had no personal knowledge on the matter.

74.  Nineteenth, neither would I place great weight on W’s oral evidence unless such evidence is supported by documentary evidence, as there are times when W was apparently not telling the truth (or at least not the whole truth) in Court.  Further, “suspicion” is inadequate in proving a case. 

75.  To conclude, I hold that Sister is the beneficial owner of WIRE LTD and its subsidiaries (namely, Wire Australia, Wire NZ and Wire Singapore), and that WIRE LTD is not a financial resource available to H.

76.  The declarations and orders sought by W by virtue of her Points of Claim filed on 7 July 2021 are therefore dismissed.

E2.  Extension of the Family Loan Agreement (Issue 3)

77.  A brief background of the Family Loan Agreement and its extensions has been set out in Section B3 above.

78.  As aforesaid, W does not take issue with the Family Loan Agreement itself.  She accepts that this is a genuine transaction and that there was indeed a loan granted by H to Sister.

79.  What W challenges are the Extension Agreements.

80.  The Extension Agreements are similar.  They basically provide that the due date for repayment of the Sister Principal Amount (or the outstanding amount, as the case may be) would be extended, and apart from that, the original terms and conditions in the Family Loan Agreement shall remain in full force and effect.

81.  In W’s Points of Claim filed on 7 July 2021, she asked for an order that:

“[…] the purported agreement between [H] and [Sister] on 8 March 2021 to extend the loan repayment of US$2,502,230 until 13 March 2023 be set aside, with declaration and determination that [H] is entitled to take over the [WIRE LTD] Shares and [Sister] is obliged and liable to transfer the [WIRE LTD] Shares to [H]”

82.  The aforesaid relief is claimed pursuant to section 17(1)(b) of MPPO which provides that:

“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—

[…] 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)”

(emphasis added)

83.  Section 17(4) of MPPO further provides that:

“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”

84.  The first question which this Court has to decide is whether the extensions of the repayment date of loan can be regarded as a “disposition” in the sense of section 17(1)(b) of MPPO. 

85.  In my view, it cannot be so regarded.

86.  This is because the extensions themselves do not amount to disposal of any of H’s rights or assets.  They only defer the time upon which H could exercise his rights (in requiring the transfer of the WIRE LTD shares).

87.  This alone would be enough to dismiss W’s claim in this respect.

88.  Even if I am wrong, I do not think this Court is able to find that the Extension Agreements were made for the purpose of keeping the WIRE LTD shares out of W’s reach so as to defeat her claim for financial provision.

89.  W argued otherwise, by suggesting that there was no commercial reason at all for the Extension Agreements to be entered into, and that Sister had not provided any consideration.

90.  However, as I have emphasised above, one has to bear in mind that the financial arrangements were made between 2 family members who are all along very close to each other. 

91.  Further, it is not right for the Court to look at the “commercial reason” of the Extension Agreements when there is equally no “commercial reason” for H to grant Sister such a large amount of interest-free loan for 2 years in the first place, which agreement was entered into under the witness of W who has no objection against it for the purpose of this trial.

92.  That being the case, H’s conduct of entering into the Extension Agreements cannot amount to “gross and obvious” conduct which warrants an “addback”.

E3.  Alleged transfer of the family loan (Issue 4)

93.  This issue raises the question of whether H has transferred the family loan / Family Loan Agreement to HH HK, and if so, whether the value of WIRE LTD should thereby be added back as conduct which the Court should have regard.

94.  This issue is in fact not understood.

95.  As pointed out by counsel for H, if the loan had been transferred to HH HK, it would have the effect of offsetting H’s director liability to HH HK.  It would be treated as a receivable to HH HK and correspondingly would reduce H’s liabilities owed to HH HK.  In other words, the net financial position of H would remain the same.

96.  The transfer of the loan was also reflected in the audited statements reviewed by the single joint expert’s valuation expert, and thus factored into his valuation of WIRE LTD and HH HK, which W has accepted for the purpose of this trial.

97.  In such circumstances, there is simply no room for W to argue for any “addback”.

E4.  Beneficial ownership of the 12D Flat (Issues 6 and 7)

98.  W’s pleaded case on the 12D Flat may be summarised as follows:

(1)  Having got married in November 2017, Sister lived in India until early 2018 when she returned to Hong Kong and resided at the Matrimonial Home;

(2)  In around early July 2018, W introduced Sister to an estate agent (“Estate Agent Kit”) for the purpose of looking for a rental property;

(3)  On around 20 July 2018, H and W decided to invest in 2 flats in Yuen Long;

(4)  On 28 July 2018, H and W submitted 2 initial booking forms to show their intention to purchase 2 flats.  Those 2 forms were in the names of H and W respectively;

(5)  On 30 July 2018, H learned that a very heavy stamp duty (equivalent to 30% of the purchase price) would be payable by a non-permanent resident buyer of landed properties like W.  It was therefore decided that:

(a)  The name of one of the initial booking forms would be changed from W’s name to Sister’s name;

(b)  One of the flats would be purchased in Sister’s name, on the condition that Sister would eventually transfer the flat to W once she has become Hong Kong permanent resident;

(c)  H and W would use their joint savings to settle the down-payment, and that Sister would pay the mortgage monthly instalments directly rather than paying rent to H and W;

(6)  Although H initially was minded to execute a loan agreement, a power of attorney or a promissory note to reflect the aforesaid trust agreement, this idea was eventually abandoned;

(7)  H subsequently paid down payment and legal fees in the total sum of around HK$2.3 million for the 12D Flat.  On the other hand, Sister applied for mortgage in her name, with H and W as guarantors;

(8)  As it was expected that Sister and her husband would live in the 12D Flat for sometime, they were allowed to furnish the flat as per Sister’s liking.

99.  On the other hand, it is H’s case that:

(1)  It was H who introduced Sister to Estate Agent Kit;

(2)  In around June 2018, Sister contacted Estate Agent Kit, and asked him to search for an apartment, either to rent or to buy, the latter with the financial assistance of Father;

(3)  In July 2018, H informed W that he wished to purchase a flat as an investment.  In response, W suggested to buy 2 flats, one for himself and the other one for her.  At this stage, nothing was agreed/decided yet;

(4)  Also in around July 2018, H informed Sister that he and W were considering to purchase a property.  He proposed to Sister, who was looking for a flat at the time, to rent an apartment from H at HK$30,000 per month.  Sister did not accept this offer;

(5)  In around end of July 2018, Father informed Sister that he would not be giving her a wedding gift (following Sister’s wedding on 23 November 2017) despite the Indian tradition.  Mother therefore requested H, as the eldest son of the family, to take up the responsibility of giving Sister a wedding gift;

(6)  H then asked Sister what she wanted as a wedding gift.  While she informed H that she wanted a 2-bedroom apartment in Yuen Long, she and her husband did not want such an extravagant gift, therefore H was only requested to pay for the down payment of the flat, and Sister would obtain a mortgage for the remaining balance which she would be solely responsible to repay;

(7)  Both H and W agreed to pay the down payment as a wedding gift to Sister;

(8)  With the above arrangement agreed, Sister was brought by Estate Agent Kit, together with H and W, to view different flats on 28 July 2018;

(9)  H then contacted Estate Agent Kit to fill out forms of intent using Sister’s name and W’s name respectively.  However, Estate Agent Kit filled out one of the forms with H’s name instead of Sister’s name by mistake;

(10)  In around late July 2018, H instructed W to revise the name on the booking forms, such that one flat would be purchased in W’s name, and the other in Sister’s name;

(11)  H inquired with Estate Agent Kit about W executing a promissory note, loan agreement and/or any other document as H was providing the initial funding for the purchase of their flat and would be the beneficial owner thereof.  At the end of the day, no such document had been executed because Estate Agent Kit told him on 30 July 2018 that it was not possible to execute such documents under Hong Kong law;

(12)  On 30 July 2018, Estate Agent Kit informed H that, as W was not a Hong Kong permanent resident, there would be a 30% stamp duty on top of the purchase price.  As a result, with W’s consent, the flat was registered under the name of H, and the booking forms were submitted accordingly;

(13)  On 4 August 2028, upon a “lottery” conducted by the developer, Sister was given the first opportunity to choose which flat to buy in the development concerned.  Sister then chose the 12D Flat, and executed the preliminary sale and purchase agreement;

(14)  H then paid the down payment for Flat 12D as a gift to Sister;

(15)  At all material times, Sister and her husband had been responsible for the mortgage instalments, management fees and utilities expenses.  They had also paid for the renovation expenses with their own funds.

100.  Sister’s pleaded case is similar to that of H, save that the followings have been added:

(1)  When Sister got married in November 2017, Father told her that he had saved some money and promised to give it to her as her wedding gift in accordance with Indian tradition;

(2)  In around end of June/early July 2018, Father told her that she should consider buying an apartment of around HK$6 million. On 20 July 2018, Sister instructed Estate Agent Kit to search for apartments of around HK$6 million for purchase purpose;

(3)  However, by the end of July 2018, Father told her that he would have to renege on his promise because “he would be investing too much of his savings in renovating [the Matrimonial Home] that began in early 2018”.  As Mother was upset about this, she asked H to step in Father’s shoes and give Sister a wedding gift, which H agreed;

(4)  The reason why H and W were guarantors of Sister’s mortgage loan was because Sister was unable to fully satisfy the mortgagee bank’s stress test.  At the time, the only persons within the family who could act as guarantors were H and W;

(5)  The renovation expenses of the 12D Flat were in the total sum of HK$300,000 to HK$400,000, and were paid by Sister and her husband.

101.  It can therefore be seen that the crux of the matter was: why was the 12D Flat registered under Sister’s name – was it because it was a wedding gift to her given by H, or because she was asked to hold the flat as a trustee only, for the purpose of avoiding extra stamp duty?

102.  Having considered the evidence and the submissions carefully, I find on the balance of probabilities that Sister was indeed only holding the 12D Flat on trust for H and W who are the real beneficial owners thereof, and that the flat was not a wedding gift as alleged by H and Sister.  The reasons are as follows.

103.  First, Sister admitted that on as late as 19 July 2018, she was still asking Estate Agent Kit to look for suitable flats for rental purpose.  This is inconsistent with her pleaded case that Father had told her in around end of June/early July 2018 that she should consider buying an apartment of around HK$6 million as wedding gift.

104.  Second, according to the evidence of Sister’s husband, Sister did not tell him about Father’s promise until July 2018.  However, Sister said Father had already made his promise in as early as November 2017 (if not earlier, as Sister had also mentioned in her evidence that the promise was made in mid-2017).  That being so, it is incredible that, if there was indeed such a promise, Sister would withhold it from her husband for such a long time, particularly when her husband was about to move over to Hong Kong, and accommodation must be one of the matters which the couple would have to consider carefully.

105.  Third, according to Sister’s pleaded case, Father told her in end of June/early July 2018 to look for a property which costs around $6 million.  Then Father “renege on his promise” on 25 or 26 July 2018 because, it was said, he had spent his money on the renovation of the Matrimonial Home.  However, it is noted that such renovation started in early 2018.  Father’s alleged change of mind within such a short period of time long after the commencement of the renovation does not make sense.

106.  Fourth, W’s case is consistent with H’s own message sent on 20 July 2018 to W that he had proposed to Sister that he would buy a flat which could be rented to her and that Sister had agreed to this proposal.

107.  In this regard, Sister and H relied heavily on a message which was sent by Sister on 20 July 2018 at 12:09pm to Estate Agent Kit.  It reads:

“We r considering to buy apartment n the budget will be 6million […]”

108.  It was argued by H and Sister that when this message was sent, H had not brought up the topic of “buying a flat for rental to Sister” with W.  Therefore, it was said, Sister’s instruction to Estate Agent Kit could not be caused by anything proposed by H.  I reject this submission because:

(1)  It is more likely than not that H had discussed about his plan with Sister before she sent the message at 12:09pm on 20 July 2018, because otherwise, according to the evidence placed before the Court, there was no other event which could have led to Sister’s changing of her instruction to the estate agent from “renting” to “buying”;

(2)  It was H who messaged W on 20 July 2018 that Sister had agreed to rent from him.  There is no reason why H had to misrepresent the situation to W at that time;

(3)  It should also be noted that H had expressly informed W on 20 July 2018 that:

“I have told [Sister] to book appointment to buy instead of rent as she booked for rent”

(4)  It cannot be a coincidence that the budget of HK$6 million as provided by Sister to the estate agent was mentioned for the first time on 20 July 2018: this budget was also discussed in WhatsApp messages between H and W on the very same day.  Perhaps in an attempt to give an explanation that the figure of $6 million came from Father rather than H, Sister pleaded in paragraph 11 of her Points of Defence that:

“Thus, in or around end June/early July 2018, when [Sister] was looking for apartments for rent, [Father] told her that she should consider buying an apartment of around HK$6 million. [Sister] assumed that this meant that [Father] would help her buy the apartment with the wedding gift that he had promised to give her previously. On 20^th July 2018, [Sister] instructed [Estate Agent Kit] to search for apartments of around HK$6 million to purchase. Thereafter, [Sister] and [Father] had viewed numerous properties with the intent to purchase”

Such a plea cannot save the case of Sister and H:

(a)  The plea that “Father told Sister in around end June/early July 2018 to consider buying an apartment for around HK$6 million” is not supported by any evidence at all, for Sister did not include this very important matter in her affidavit nor in her witness statement.  Neither was this mentioned in her oral evidence[8];

(b)  Sister has never explained why she suddenly decided that the budget should be fixed at HK$6 million;

(c)  Given the financial situation of Sister and her husband at the material time, there was no way that they could afford to buy any property at HK$6 million themselves[9] ;

(d)  That being the case, the only source where this budget of HK$6 million could come from was H, as it is evident from the WhatsApp communications between H and W[10];

(e)  Even if Sister did give evidence that Father had told her the said suggestion back in around end of June or early July 2018, there is still no explanation as to why she would suddenly change from “planning to rent” on 19 July 2018 to “planning to buy” on 20 July 2018. Hence, such evidence is bound to be rejected because it is difficult to understand why Sister was still discussing with the estate agent on renting a flat up to 19 July 2018.

109.  Fifth, Sister said that while H had asked her in July 2018 whether she would be interested in renting an apartment from him, she had rejected H’s proposal because H’s proposed rent was as high as HK$30,000 per month. 

110.  I do not accept Sister’s evidence that H had proposed a monthly rental of HK$30,000.  This is because, given the fact that her then monthly salary was only HK$20,000, and that his husband was yet to have a job, it is inherently improbable that H would have proposed such a high rent to her.  This is particularly when it cannot be disputed that the relationship between H and Sister was always very close.  I do not believe that H would have made a proposal which would bring great financial burden on Sister’s shoulder which she might or might not be able to afford.

111.  Indeed, even Sister admitted in Court that:

(1)  H would have known well at the material time that there was no way that she could afford a rental of HK$30,000 per month; and

(2)  It made no sense that H would make such a proposal to her at the time.

112.  H explained that HK$30,000 was not particularly high since he was looking for a job for Sister’s husband, and the job would provide him with a monthly salary of around HK$60,000.  Again, this evidence is rejected.  The fact remains that when H made the rental proposal to Sister, such a job was not secured. 

113.  Furthermore, if H considered that the monthly rental of HK$30,000 should be affordable for Sister and her husband in light of the prospect of him getting a lucrative job for Sister’s husband, it would be strange to the extreme that H would have concealed such an important information from Sister and her husband at the time.  However, it can be inferred that they knew nothing about it[11].

114.  In such circumstances, it is incredible that H would have made the alleged proposal to Sister.

115.  Sixth, H’s discussion with Estate Agent Kit on loan agreement, promissory note and power of attorney also supports W’s case that the 12D Flat was held by Sister on trust.

116.  In this regard, it is H’s pleaded case in his Points of Defence that:

“7(17) [H] also inquired with [Estate Agent Kit] about [W] signing a promissory note, loan agreement and/or any other relevant documents as [H] was providing the initial funding for the purchase of their unit and would be the ultimate beneficial owner thereof. The documentation would record this to avoid conflict about ownership of the property in the future. [Estate Agent Kit] clarified on 30 July 2018 that these documents were not possible to execute under Hong Kong law.

7(18) On 30 July 2018, [Estate Agent Kit] informed [H] that, as [W] was not a Hong Kong permanent resident, there would be a 30% greater stamp duty to be paid for their unit.  [H] informed [W] of the same.  Consequently, [H] requested [Estate Agent Kit] to register their flat in [H]’s name, which was agreed by [W].”

117.  It can be seen that the pleaded purpose for the loan agreement, promissory note and/or power of attorney was to protect H’s own interest because he would be the one who would pay for the property which would be registered under W’s name.

118.  However, Estate Agent Kit’s WhatsApp messages to H (by which the estate agent advised H on the use of the said documents) do not support H’s case.  Estate Agent Kit stated on 30 July 2018:

3:04pm: “Loan agreement / promissory note / Power attorney”

3:05pm: “You can do this 3 document just under 20K”

3:05pm: “But I think we can discuss the detail after confirm but the unit”

3:07pm: “Because for Hk law, the lawyer can not suggest you to do that document

But if the case is you order the lawyer to do, that should be okay”

3:12pm: “And I think within this 3 years to sell is not possible, and you can consider change back to your wife name one your wife over 7 years and the unit over 3 years”

(emphasis added)

119.  It can be seen that Estate Agent Kit was talking about transferring the flat back to W after “7 years” (it is inferred that that means when she obtained her Hong Kong permanent resident status).  If the flat was already registered under her name (such that it was necessary to protect H’s beneficial interest in the flat by asking W to execute the aforesaid documents), then it made no sense for the estate agent to say “change back to your wife”.

120.  Furthermore, the discussion between H and Estate Agent Kit appeared shortly after H was informed by the estate agent that since W was not a Hong Kong permanent resident, 30% stamp duty would be payable.  H then said that, in that case, he “think[s] need to change” “The property name”, which is inferred to mean that “in that case, he thought it was necessary to change the name of the buyer of the property”.

121.  It is therefore more likely than not that the need for “loan agreement, promissory note and/or power of attorney” arose because W’s name could not be used as the buyer of the 12D Flat.

122.  Moreover, the truth can be even more clearly seen by reference to the WhatsApp messages exchanged between H and W on the same day. 

123.  Shortly after H received the aforesaid messages from Estate Agent Kit, H forwarded the same to W, and then W replied immediately:

“Don’t pay 20k for this doc”

“Waste of money”

“Let’s 2 yrs go we will see then”

124.  If the documents were signed for the protection of H’s interest (as against W’s legal title), then it was really not up to W to say that it is a waste of money for such documents to be executed.

125.  Last but not least, H said in court that the documents were necessary because W wanted to give him a sense of security. In my view, this is a blatant lie which H made it up when he was in the witness box.  The reason is simple:  As aforesaid, by the time the matter related to these documents was brought up, it was already known that the property would not be purchased under her name because of the extra stamp duty payable. 

126.  Seventh, according to H’s case, he was always only thinking about buying one flat for investment purpose, and the other flat (the 12D Flat) was not bought by him as such.  He only paid the deposit thereof for Sister as a wedding gift.

127.  This is inconsistent with what H and W discussed on 3 August 2018 by WhatsApp.  On this day, H informed W that the bank would charge HK$18,000 for a pre-approved loan of $18 million.  W then said:

“Baby take one property then”

“Let’s not pay so much […]”

“Baby why do you want pre approved loan?”

128.  It is apparent from the above messages that H was planning to buy more than one property, otherwise W would not have tried to persuade H to get only one property.  Again, this is more consistent with W’s case.

129.  Eighth, on 5 August 2018, W sent another message as follows:

“Kit was saying for the agreement between you and [Sister] Lawyer will charge 13000 hkd”

130.  If the relationship between H and Sister in relation to the purchase of the flat was only donor and donee, why was there any need to have an agreement signed between H and Sister?

131.  On the other hand, this would be more consistent with the scenario where Sister was holding the 12D Flat for the benefit of H and/or W. 

132.  Ninth, on 5 August 2018, H sent the following WhatsApp messages to W:

“Plz don’t tell my dad that I bought property”

“Plz don’t discuss anything about my property or my sisters property”

133.  There is no evidence as to why H did not want Father to know that he had purchased landed property/properties.  However, that is not the point.  If H was telling the truth that he was actually only standing in Father’s shoes in giving Sister a substantial wedding gift according to Indian tradition, there is no reason why H had to specifically ask W not to discuss anything about it because this, according to Sister and H, was a matter which was discussed in the family (even if Father was not told about this beforehand). 

134.  Tenth, I do not accept H’s argument that if Sister was indeed holding the 12D Flat on trust, then there was a conspiracy to defraud the tax authorities of the HKSAR, and as a result the Court would not grant any equitable relief.  This is because, as pointed out by W’s counsel, W’s case was that Sister was also holding the 12D Flat for the benefit of H.  If this Court accepts H’s argument and refuses to recognize that the 12D Flat is part of the family asset, H would be benefitted from this illegality argument even though he was part of the arrangement (indeed, he was the one who started it).  That cannot be right, and this Court would not allow this to happen.

135.  Eleventh, this Court has been reminded that when H texted Estate Agent Kit on 29 July 2018, he stated that:

“may be one will use for family and other one will give to my sister”

136.  It was therefore argued by H that he had indicated his intention that the 12D was a gift to Sister.

137.  I do not accept this argument.

138.  In my view, the Court should not place too much weight on the exact wordings of the messages as such, as if they are statutes.

139.  Twelfth, this Court has not lost sight that W herself had described the 12D Flat as “[Sister]’s property” even after she had separated with H.  However, as aforesaid, I do not think the Court should place too much weight on such wording, which is also compactable with, for example, “the property used by Sister”.  In my view, the overall circumstances which I have analysed above are much stronger indicators which show where the beneficial interest lies.

140.  Thirteenth, it has been argued that if it is indeed true that the 12D Flat was owned by H and/or W beneficially, then once these proceedings started, there is no reason why [Sister] should still continue to pay for the mortgage instalments, as there is always a risk that the Court would determine against her case.

141.  That may be so.  However, when the Court considers the conduct of the parties, I am of the view that much more weight should be placed on the conduct of the parties at the time when disputes were yet to arise. 

142.  Fourteenth, it was argued by Sister’s counsel that there could not be any common intention constructive trust among H, W and Sister because there had never been any direct communication between W and Sister in relation to the purchase of the 12D Flat.

143.  With greatest respect, this argument is misconceived.  In the circumstances of the case, I have no doubt that H had the authority to discuss the matter in relation to the 12D Flat with Sister on behalf of W. 

144.  Fifteenth, I have not lost sight of the fact that the trust arrangement is not evidenced by any document.

145.  However, I do not think that matters.  After all, this is an arrangement within the same family.  More importantly, it is evident that H and Sister have always had a very close relationship.  That explains why even though H initially had made enquiries with Estate Agent Kit on the preparation of such documents, they were not prepared accordingly for costs concern.  Indeed, even W persuaded H not to incur costs on those documents.

146.  Sixteenth, this Court had been reminded that Sister and her husband had paid $250,000 expenses on fixtures and furniture used in the 12D Flat, as well as management fees and government rates.  However, I do not think this factor would be enough to tilt the balance.  After all, since Sister and her husband were living in the 12D Flat, it is not surprising for them to bear such expenses.

147.  Seventeenth, Sister’s counsel took a pleading point, and submitted that:

“82. In her Points of Claim, the Wife alleged that [Sister] is to hold [the 12D Flat] on trust for both herself and the Husband. However, at the Wife’s 1^st affirmation and the Wife’s witness statement, her allegation changed to an assertion that [Sister] would be holding the property on trust for the Husband only and that the Husband would transfer the property to her once she became a Hong Kong permanent resident.

83. It is rather telling that the Wife cannot even get straight the most basic element of her case on the trust arrangement behind [the 12D Flat]. The Wife’s testimony concerning her knowledge of the acquisition of [the 12D Flat] should be taken by this Court with an even greater pinch of salt.”

148.  With greatest respect, this point is misconceived, for W has always pleaded that the beneficial owner(s) was/were H and/or W.

149.  Eighteenth, I do not accept H’s case that nothing was agreed upon between H and W on the purchase plan on 20 July 2018.  From the WhatsApp messages, it can be inferred that H must have accepted W’s suggestion that 2 flats be bought, as H stated that:

At 4:41pm

“I will buy she pays rent to me”

“I asked her she is ok”

At 4:48pm

“we can rent to staff whom we will hire”

150.  It can be seen that H must be talking about 2 different flats at that time, in the space of 7 minutes.

151.  Finally, Sister’s counsel argued that:

“It was not disputed that for the mortgage of the [12D Flat], there was a cash rebate that was paid into [Sister]’s mortgage account. The Wife also said that she is aware of the cash rebate. It is further shown from the bank statement of [Sister]’s HSBC mortgage bank account with account number ____________________ that on 15 May 2019, an amount of HK$88,126 was transferred into the account. However, there is no evidence suggesting that the Wife had ever asked for the repayment of the rebate or that the amount for the rebate was transferred to her. As such, it is submitted that if [Sister] is not the beneficial owner of the [12D Flat], it makes no sense why she will be the one receiving the cash rebate instead of the Wife, with the Wife never asking for the amount.”

152.  With respect, this submission was made in disregard of the undisputed fact that the relevant communication with Sister in relation to the purchase of the 12D Flat was done exclusively by H.  Indeed, this feature was made use of by Sister’s counsel himself in his argument (see above).  W has also explained in Court (which I accept) that the mortgage application was coordinated by H.  In these circumstances, I do not think much argument could be made out of the rebate.

153.  To conclude, I find that the 12D Flat has been held under Sister’s name on trust for H and W.  For the avoidance of doubt, I should also clarify that, in my view, it was intended all along that both H and W would be the beneficial owners despite the fact that, but for the stamp duty issue, the 12D Flat would have been registered under W’s sole name.  This is because:

(1)  It can be seen from the WhatsApp communication between H and W that the investment on the 2 flats was a family decision;

(2)  The purchase money was paid out from the joint bank account with Hang Seng Bank.

E5.  The alleged dissipation of HK$4.75 million via SWYP (Issue 10)

154.  This issue asks the question of whether H has dissipated HK$4.75 million through SWYP, and whether such a sum should be “set aside” under section 17 of MPPO and/or added back.

155.  Although Mr Marwah for W has confirmed at his oral opening submissions that he is not seeking to “set aside” anything in this regard under Issue 10, he has still referred to this issue in his closing submissions.  Hence, for the sake of completeness, I will deal with this issue according to its original form.

156.  I regret to say that there are quite a number of problems in relation to W’s claim in this regard.

157.  The first problem arises from a pleading point which in my view is fundamental and fatal to W’s claim.

158.  On 31 May 2021, Her Honour Judge Melloy ordered, inter alia, that the beneficial ownership of “shares of and in [SWYP] or any part or portion thereof” be tried as preliminary issues.  W was also directed to file and serve her Points of Claim for the said purpose.

159.  In W’s Points of Claim filed on 7 July 2021, one of the reliefs claimed was:

“Further or alternatively, if and insofar as the Husband has dissipated matrimonial assets to the 2^nd Intervener and/or [SWYP], the same ought to be set aside.”

160.  Despite the inclusion of such a relief, not only the figure of HK$4.75 million was nowhere to be found in the body or the prayer of the Points of Claim, there is also nothing in the Points of Claim which amounts to any allegation that H had ever dissipated his funds through SWYP.

161.  In this regard, it must be emphasised that, once the Court has ordered the parties to matrimonial proceedings to file and serve Points of Claim, Points of Defence and Points of Reply, these documents will form the pleadings in relation to the particular issue(s) raised.  The general principles on pleadings will apply.  I do not think I have to quote any authority other than Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663, in which Chief Justice Ma reminded at [21] thereof that:

“It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited[12]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced […]”

162.  It may well be that W was only aware of the figure of HK$4.75 million upon her perusal of a letter dated 9 September 2022 sent by H’s solicitors to her solicitors (i.e. more than a year after she filed her Points of Claim).  However, that would not make it permissible for her to rely on an unpleaded issue.  If she so wished, she should have applied for amendment of her pleadings, which she did not.

163.  Her claim to “set aside the dissipation” should therefore be dismissed for this reason alone.

164.  Even if W is allowed to rely on this unpleaded issue, this claim is bound to fail.

165.  Firstly, it appears from W’s section 7 MPPO Affirmation that the basis of her claim is that “[HH HK] put HK$4.5 million into [SWYP]” and that “no logical reason has been provided as to where that amount has disappeared to”. 

166.  However, it is trite that:

(1)  “Property” under section 17 of MPPO is restricted to property beneficially owned by H;

(2)  The assets of a company are not assets of its shareholders, whether in the context of section 17 of MPPO or under the law generally;

(3)  Section 17 makes it clear that the disposition must have been made by the other party to the proceedings but not a third party, unless it can be shown that the third party is the other party’s servant, agent, nominee or trustee:

WYSL v FHCBA [2018] HKCFI 1543, at [52].

167.  Therefore, the sum of HK$4.75 million (or HK$4.5 million) cannot be the subject matter of a section 17 application.

168.  Secondly, W submitted that the timing of H’s investment into SWYP is suspicious.  However, as pointed out by H’s counsel, since H has not been cross-examined on such timing, W should not be allowed to rely on this argument.

169.  Thirdly, I do not think it is correct for W to describe the HK$4.75 million as an investment, because it was recorded as a receivable amount due to HH HK (see SWYP’s audited financial statements for the period of 18 months ended 30 September 2021 in which a sum of AED2,120,159 was recorded as a “borrowing” from HH HK).

170.  Fourthly, even if there was any “dissipation” as such (which I do not think so), such dissipation was related to HH HK’s asset, which apparently would have an impact on the value of HH HK.  However, it is noted that the single joint expert engaged by the parties had come to his conclusion on the value of HH HK, having taken into account the aforementioned SWYP’s audited financial statements, and more importantly, W has for the purpose of this trial accepted the expert’s valuation.  That being so, I do not think it is now still open to W to query the loan of HK$4,750,000.

171.  Fifthly, W admitted in her oral evidence that she could not challenge the expenses incurred by SWYP as illegitimate or fake, nor could she challenge the financial statements of SWYP which had been audited.  As such, there is no basis for W to allege that there was dissipation or hiding of funds.

172.  It follows that W’s submission that there should be “added back” of HK$4.75 million should also be rejected.  There is simply no basis for W to allege that there was any “obvious and gross” misconduct on the part of H.

E6.  Beneficial ownership of BSP Limited (Issues 11 and 12)

173.  The issue here is whether BSP Limited belongs to H or the 3^rd and 4^th Interveners.

174.  It is undisputed/indisputable that:

(1)  BSP Limited was incorporated in India on 19 November 2020;

(2)  At the time of its incorporation, the shareholders were Mr Shah (9,000 shares) and the 4^th Intervener (1,000 shares);

(3)  Mr Shah held a managerial position in both BSP Limited and _________________________________________________(“HH India”);

(4)  The 3^rd Intervener is H’s maternal uncle, and was an employee of HH India until November 2021;

(5)  The 4^th Intervener is H’s best friend. He is also a director of HH India and _________________________________________________ (“BGSPL (India)”);

(6)  By virtue of a Services Agreement dated 1 January 2020, BSP Limited served HH HK exclusively (“the BSP Services Agreement”);

(7)  BSP Limited shared the same registered office as has been used by HH India, BGSPL (India) and b********.com;

(8)  BSP Limited used the same logo as _________________________________________________ (“BTHKL”), which was wholly owned by H;

(9)  BSP Limited and BTHKL used the same content for online marketing;

(10)  H has used the “BIRF” brand in a number of his companies;

(11)  In HH India’s audited report dated 19 August 2021, BSP Limited was described as a “company under common control” with HH India, which is a subsidiary of HH HK;

(12)  After Mr Shah’s employment with HH India was terminated in around November 2021, he was replaced by the 3^rd Intervener as director of BSP Limited.  Mr Shah also transferred 8,900 shares in BSP Limited to the 4^th Intervener on around 22 November 2021, and the remaining 100 shares to the 3^rd Intervener (who at the material time was employed by HH India) on around 16 November 2021.

175.  It is also indisputable that the BSP Services Agreement provides, among other things, that:

(1)  Clause 3: BSP Limited will not provide services of any kind to third parties without the prior written consent of HH HK;

(2)  Clause 4(iv): BSP Limited shall, at all times, act in the best interest of HH HK;

(3)  Clause 4(v): BSP Limited shall follow the instructions/directions which HH HK may stipulate from time to time.

176.  Mr Shah has not been called to give evidence at the trial.

177.  It is the common case of the 3^rd and 4^th Interveners that the 4^th Intervener has been the sole beneficial owner of BSP Limited since November 2021, and that the 3^rd Intervener only held 100 shares in BSP Limited as his trustee.  That being the case, the 4^th Intervener’s evidence has to be scrutinised closely.

178.  As far as the 4^th Intervener’s evidence is concerned, I regret to say that many parts thereof do not make sense.  I also observed that he always answered questions by asking a question, rather than answering the cross-examination questions directly.  For example, he refused to answer the question of whether the BSP Services Agreement was important to him.  It was only after quite a few follow-up questions that he eventually stated that the said agreement was not important.  This is an extremely strange answer because this agreement represented the only business project of BSP Limited which, he alleged, was wholly owned by him beneficially.

179.  The 4^th Intervener’s evidence is also self-contradictory on very important matters.  For example, in paragraph 11 of his 1^st Affirmation, he stated that:

“[Mr Shah] and I wanted assurances from [H] that he would avail all of the services of [BSP Limited], so we wanted [H] to sign the agreement beforehand. For this reason, the deal was signed in January 2020; soon after the agreement signing, the company was incorporated in November 2020.”

(emphasis added)

180.  However, in his oral evidence, the 4^th Intervener told this Court that:

(1)  He was only responsible for the operation side of the matter.  It was Mr Shah who was looking after everything;

(2)  He was not involved in the BSP Services Agreement at all, and the negotiation was conducted by Mr Shah with H.

181.  When the 4^th Intervener was cross-examined on this discrepancy, he blamed the translation.

182.  I do not accept his explanation which is totally unbelievable.

183.  Hence, generally speaking, I do not accept his evidence.

184.  It is my finding that H is the beneficial owner of BSP Limited.

185.  My reasons are as follows.

186.  Firstly, the following matters, when they are considered together, clearly point to the conclusion that BSP Limited was H’s company:

(1)  H stated that the object of the incorporation of BSP Limited was “to form a company to provide IT outsourcing services to [HH HK]”. In other words, the incorporation of BSP Limited was for the sole benefit of HH HK, a company which is basically owned by H (apart from 1.5% shareholding therein);

(2)  The name “BIRF” has been used by H in a number of his companies;

(3)  The initial shareholders were closely related to H: Mr Shah was an employee and director of HH India, whereas the 4^th Intervener is H’s childhood friend and was also an employee of HH India;

(4)  BSP Limited shared the same registered office as has been used by HH India, BGSPL (India) and b********.com;

(5)  BSP Limited used the same logo as BTHKL which was wholly owned by H;

(6)  BSP Limited and BTHKL used the same content for online marketing.

187.  Secondly, as aforesaid, after Mr Shah’s employment with HH India was terminated in around November 2021, he was replaced by the 3^rd Intervener as director of BSP Limited.  Mr Shah also transferred 8,900 shares in BSP Limited to the 4^th Intervener on around 22 November 2021, and the remaining 100 shares to the 3^rd Intervener (who at the material time was employed by HH India) on around 16 November 2021.  This supports W’s case that Mr Shah was only a nominee of H, otherwise there was no reason why, upon termination of his employment, he would have to cut his connection with BSP Limited.

188.  Thirdly, the 4^th Intervener pleaded that when Mr Shah left his employment with HH India, Mr Shah “was keen on closing [BSP Limited]” but the 4^th Intervener “persuaded him to sell the shares”.

189.  The said plea was not covered by the 4^th Intervener’s affirmations or oral evidence at all.  Hence, there was no evidence explaining the circumstances under which Mr Shah’s shares in BSP Limited were transferred to the 3^rd and 4^th Interveners.

190.  Fourthly, even if the 4^th Intervener did include his plea in this regard in his affidavits, such evidence would be rejected.  This is because such evidence does not sit well with his own admission that he did not ask for a copy of the BSP Services Agreement until October 2023 when W served a section 17 summons on him.  If the 4^th Intervener was the real beneficial owner of BSP Limited as such, it is beyond imagination that he would not have asked for a copy of the BSP Services Agreement right away given such an agreement represented the only business venture of BSP Limited.

191.  Fifthly, the 4^th Intervener stated in Court that he only knew that BSP Limited was obliged to work for HH HK exclusively after 3 October 2023 when he obtained a copy of the BSP Services Agreement.  If that is so, it is inherently improbable that he has been a beneficial owner of BSP Limited as alleged.

192.  Sixthly, I do not accept the arguments made by H and the 4^th Intervener that the joinder of the 4^th Intervener was made by W with ulterior motive. 

193.  I therefore make a declaration that H was at all material times and remains the beneficial owner of 100% of the shares in BSP Limited which are held by the 3^rd Intervener and the 4^th Intervener on trust for him.

E7.  The INR51,635,727 transferred to BSP Limited (Issue 13)

194.  The issue here is whether the total sum of INR51,635,727 (approximately HK$4,847,036) transferred to BSP Limited was dissipated by H and whether the same should be added back to the matrimonial pot.

195.  The sum of INR51,635,727 was made up by 2 parts:

(1)  INR49,935,727 – W got this figure from the Annual Return of BSP Limited dated 4 October 2023. W alleged that while H has put this sum into BSP Limited, he has failed to account for its whereabouts;

(2)  INR1,700,000 – This figure was obtained from HH India’s audited report for the period ended 31 March 2021, in which it was shown that a loan had been advanced by HH India to BSP Limited.

E7.1   INR49,935,727

196.  The aforesaid figure of INR49,935,727 is shown in the Annual Return of BSP Limited for the period ended 31 March 2022 (“the 2022 BSP Annual Return”) as “GST Turnover”.  W’s counsel accepted that this represents BSP Limited’s revenue during the period covered by the said Annual Return.

197.  W’s counsel pointed out that, while the audited reports of BSP Limited indicate that the total revenue in 2021 and 2022 was under INR38.5 million, the March 2022 tax return indicates that the revenue in that year alone was INR49.9 million, (i.e. INR11.5 million more).  It was therefore said that there was a discrepancy.

198.  However, even if that is the case, it is not understood how it could be said that the said sum of INR49,935,727 was “dissipated”.  The expenses have been recorded in audited accounts.  W has not proved any basis upon which this Court may find, despite the fact that the relevant accounts have been audited, that the revenue amounts are false or are made up for the purpose of “dissipation of H’s funds”.

199.  Furthermore, the single joint expert who had been appointed to assess the value of BSP Limited had had sight of all those documents, and he was clearly aware of the so-called “discrepancies”.  He had explained the “discrepancies” in the following way:

“4.1.4 I have looked into [BSP Limited]’s financial statements. The total revenue recorded in FY2021 and FY2022 was INR 38.45 million, which is pretty close to the taxable turnover recorded on the annual return, which is INR 38.44 million.

4.1.5 The timing of recognising a revenue depends on not only the invoice date but also other factors, such as when the risk has been transferred, when the services were confirmed to fulfil the requirements, etc. Therefore, I believe the revenue recorded on the audited financial reports is reliable.”

200.  In these circumstances, nothing can be made out of the so-called discrepancies.

201.  It should of course also be borne in mind that the revenue amounts were supposedly paid by HH HK (which was BSP Limited’s only client).  Those monies do not belong to H at all.

202.  To conclude, W has failed to establish that there was any misconduct on the part of H in this regard.

E7.2  INR1,700,000

203.  In relation to the loan of INR1,700,000, it should be pointed out immediately that it is regrettable that this claim in the entirety of the sum of INR1,700,000 is made, because, in HH India’s audited report for the period ended 31 March 2021 (the report from which the figure of INR1,700,000 was obtained), it can be seen right below the line of “17,00,000” that a sum of “14,00,000” had been repaid, and the outstanding amount owed by BSP Limited was only “3,00,000”.  In other words, if any, the claim could only be no more than INR300,000. 

204.  The said sum of INR300,000 was classified as “short term borrowing” and can still be seen in BSP Limited’s audited report for the period ended 31 March 2022 as such.  However, this sum was no longer there in BSP Limited’s audited report for the period ended 31 March 2023, and there was no figure shown under the item “short term borrowing”.  It can therefore be inferred that this remaining loan of INR300,000 had been fully repaid.

205.  W’s claim in relation to the sum of INR1,700,000 must therefore fail.

E8.  The alleged dissipation of HK$3,545,000 & HK$3,950,000 (Issue 14)

206.  This concerns the question of whether H has dissipated a sum of HK$3,545,000 as HH HK’s IT expenses and a sum of HK$3,950,000 as HH HK’s marketing / branding expenses for 2021, and whether such sums should be added back.

207.  The easiest way to explain W’s argument in this respect is to quote the following paragraphs from W’s closing submissions:

“83. W’s case on [HH HK]’s IT and marketing expenses is that (1) they quadrupled after these proceedings started, and (2) H has refused to provide the supporting documents to account for the massive increase in those expenses.

84. According to the [HH HK] management accounts recorded by the SJE, IT expenses were: HK$1.88 million in 2019, HK$0.93 million in 2020, and then rose to [HK$4.95] million in 2021. Accordingly, 2021 saw an increase of HK$3.545 million over the average from 2019-2020[13].

85. For marketing expenses, they were HK$0.18 million in 2019, HK$1.48 million in 2020, but then swelled to HK$4.74 million in 2021. That’s an increase of HK$3.91 million over the average from 2019-2020[14].”

208.  I must say at the outset that the claims here seem to me to be quite arbitrary.  Take the marketing expenses as an example. W has adopted the average of the expenses in 2019 and 2020 (HK$0.83 million), treated it as the reasonable or acceptable level of expenses, and then claimed that the difference between this average figure and the 2021 figure (HK$3.545 million) is the “abnormal” figure which had been “hidden”.  That would necessarily mean that W has no complaint against the 2020 figure (HK$1.48 million).  If that is so, then why shouldn’t the claim be only HK$3.26 million (HK$4.74 million – HK$1.48 million)?

209.  In any event, these claims must be rejected for the following reasons.

210.  First, the most fundamental problem with W’s claims here is that the expenses were incurred by HH HK but not H himself. 

211.  Second, insofar as it is said that there is no commercial sense for H to incur so much expenses for HH HK, this matter has already been raised by the single joint expert who has expressly dealt with the same in the valuation report.  Most importantly, he has not commented that the IT expenses or the marketing expenses had been incurred improperly. 

212.  Third, having taken into account the alleged unreasonable IT and marketing expenses, the single joint expert has come up with a figure as the value of HH HK which W has accepted for the purpose of this trial.  In my view, W’s attempt to “add back” the IT and marketing expenses is equivalent to challenging the valuation of the single joint expert.  This is not a course open to her now.

E9.  The alleged dissipation of HK$4,750,000 via STH LTD (Issue 15)

213.  This Court is asked to resolve the issue of whether H has dissipated HK$4,750,000 through STH LTD, and whether such a sum should be added back.

214.  In gist, it is W’s case that:

(1)  H’s decision to invest HK$4.75 million in STH LTD which is a dormant company and without revenue makes no commercial sense, and he has not given any proper disclosure about it;

(2)  H entirely failed to account for the whereabouts of the HK$4.75 million; and

(3)  All of the money was put into STH LTD after H had contemplated divorce.

215.  In her 16^th Affirmation, W had the following to say at paragraph 54:

“[H] has done the same thing with [STH LTD] as he has done with [SWYP]. According to the 9 September 2022 letter from Haldanes, although [HH HK] had invested HK$4.75 million in [STH LTD], [H] was not going to continue it […]”[15]

216.  It can therefore be seen that the “investment” was actually made by HH HK, rather than H himself.

217.  Furthermore, as it has been made clear by H’s solicitors in the said letter dated 9 September 2022 (which was the very basis of W’s claim in relation to this amount of HK$4.75 million), the money was actually not an investment but a “receivable”. 

218.  Moreover, W has accepted in court that, according to the statements which she had been provided, the expenses incurred by STH LTD were legitimate.  With that evidence, it is not open to W to maintain her claim that the sum transferred from HH HK to STH LTD was “dissipated” in the sense that it was “hidden” by H.

219.  To conclude, there should not be any “adding back” as claimed by W.

E10.  Judgment debt of AED8,003,214.49 owed to H (Issue 17)

220.  It is undisputed that, on 16 March 2021, the Court of Cassation in Dubai granted judgment against a MM in favour of H for a sum of AED8,003,214.49 (“the Dubai Judgment Debt”).  MM’s appeal to the Dubai Court of Appeal had been dismissed on 28 December 2022.

221.  W contended that the full value of the Dubai Judgment Debt should be counted as part of H’s asset, on the basis that H has obstructed the Court and W to get a full picture of the value of this asset.

222.  On the other hand, H stated in the Scott Schedule dated 28 June 2024 that there is little to no prospect of recovery of the Dubai Judgment Debt from MM.  H therefore suggested therein to write off the judgment debt entirely from the family assets.

223.  The position has since then become clearer by virtue of further discovery made by H shortly before the commencement of the trial:

(1)  On 16/17 March 2022, H applied to the Dubai Court of Execution to enforce the Dubai Judgment Debt.  As a result, the Court of Execution requested the Dubai Land and Property Department to seize the landed properties belonging to MM;

(2)  Accordingly to a letter dated 26 May 2022 issued by the Real Estate Registration Department of the Sharjah Government to the Dubai Courts, necessary measures have been taken by executing seizure on MM’s property in the District known as Al-Qarayen 2 (“MM’s Landed Property”);

(3)  According to the Real Estate Registration Department of the Sharjah Government, the estimated market value of MM’s Landed Property as at 13 September 2023 was AED2,670,000;

(4)  According to a letter issued by the Sharjah Islamic Bank dated 2 May 2023, MM’s Landed Property was subject to a mortgage in the sum of AED1,500,000;

(5)  Subsequently, MM requested the Court to stop the sales procedure of MM’s Landed Property.

224.  The result of MM’s application to stop the selling process is not apparent from the court documents produced.  H’s counsel referred this Court to page 842 of bundle E4 and alleged that MM’s request has been allowed.  However, the alleged content cannot be found on the page.

225.  On the other hand, according to a letter issued by H’s legal representative in Dubai dated 16 December 2023, MM’s application had been rejected by the Dubai Court, and as a result, H’s lawyer had applied to the Dubai Court to restart the auction of MM’s Landed Property.  At the time of the letter, the lawyer was waiting for the Dubai Court’s approval to continue with the sale process.

226.  Since no reason has been suggested by anyone as to why the Dubai Court would not allow the resumption of the sale process of the said property (which had been halted solely because of MM’s objection that has now been rejected), I find that it is more likely than not that H would be able to recover part of the Dubai Judgment Debt accordingly from such a sale. I assess the recoverable amount as AED1,170,000 (AED2,670,000 – AED1,500,000), which is equivalent to around HK$2,486,250[16].

227.  According to the said letter dated 16 December 2023, while an execution proceeding had been filed on 28 December 2022 against MM for his arrest and for attachment of his bank account in order to recover the Dubai Judgment Debt, the bank had replied to the court that there was no money in the MM’s account.

228.  I therefore find that the value of the Dubai Judgment Debt should be HK$2,486,250.

229.  I do not consider it appropriate to take the full value of the Dubai Judgment Debt for the purpose of this trial given the evidence obtained.  I also reject W’s submission that H had failed to give full, frank and timely disclosure of the Dubai Judgment Debt, since it is evident that H had indeed referred to his potential claim against MM back in October 2020.  The only complaint which W may make is that H failed to inform W and this Court upon the issuance of the “Final Ruling” in December 2022. However, the fact is that H did make the disclosure in the Form E which he filed subsequently (even though it was already in December 2023). 

E11.  Jewellery and valuable personal items (Issue 17)

230.  H alleged that W has kept jewellery and valuable items which she has failed to disclose.  H believed that she has HK$1.75 million worth of jewellery, as well as his personal watches, gold chains, bracelets, rings and gold bars which worth HK$800,000.

231.  In H’s reply closing submissions, all he could say was that since W had lied on other occasions, her explanation given in court should not be accepted.  Apart from that, H could not put forward any further argument to prove his case in this regard.

232.  Insofar as it is H’s case that W is currently keeping some jewelleries owned by Mother and Sister, it is up to them to sue W for the recovery of the same.  Those claims are therefore bound to fail here, not to mention that H had failed to produce a single message from Mother or Sister which chased W for the return thereof.  Neither did they give any witness statement in support of such claims.

233.  On the other hand, W’s arguments and evidence are much stronger:

(1)  Back in November 2018, W had already informed H by text message that the wedding jewellery was held by Mother and Sister;

(2)  If H had really left any jewelleries in the Matrimonial Home, he could have gone back and collected them.  H’s explanation that he had been thrown out of the Matrimonial Home by Father is incredible which I do not accept, since H was in control of Father’s income at the time;

(3)  H has simply failed to particularise the items which he said are kept by W.

234.  I therefore reject H’s claim.

E12.  H’s liabilities (Issue 18)

235.  Under this issue, I will consider a number of H’s alleged liabilities which W does not accept.

E12.1   The purported loan from Mr JGS

236.  H alleged that he owed Mr JGS a sum of HK$2 million.  He explained that this loan was for the purpose of financing his purchase of the 9A Flat.

237.  This loan was purportedly supported, among other things, by a loan record signed by Mr JGS on 11 April 2019, and it was said that the loan was drawn down in cash on the same day.

238.  H also produced the following WhatsApp messages in support of his case. In those messages, he stated:

“HKD 2m”

“i need today”

“i m giving u my personal ac with [HH HK]”

“200k USD credit will be granted tp u shortly”

239.  In reply, the other side simply stated “Ok”.

240.  H explained that he has spoken to Mr JGS and that the message was the only written proof which he had of the loan.

241.  H also produced a voucher dated 11 April 2019 in support.

242.  I do not accept H’s evidence.

243.  His explanation that he had received a loan from HH HK to purchase the 9A Flat and that the loan from Mr JGS was used to repay the loan from HH HK is incredible:

(1)  According to H’s Form E, the down payment of the 9A Flat was only $760,060, and the balance of the purchase price was covered by a mortgage loan granted by HSBC.  This is totally inconsistent with H’s case that the entirety of the alleged loan was for the purchase;

(2)  According to his own witness statement, the alleged loan from HH HK made on 27 March 2019 was in the sum of HK$3.2 million. A total of HK$2.5 million was also transferred from HH HK for the purchase of the 9A Flat on 9 May 2019;

(3)  Also according to his own witness statement, he had transferred a sum of HK$800,000 from his Citibank account for the purchase of the 9A Flat;

(4)  It is difficult to understand why he had to ask Mr JGS for the alleged loan of HK$2 million so as to repay HH HK;

(5)  It should also be borne in mind that HH HK was not yet affected by the social events and Covid-19 pandemic at the material time. That means the company was still doing well back then.  Further, according to the account statements, after the credit of HK$2 million in H’s account with HH HK, the balance thereof had become a positive one.  There was simply no need for H to ask for a loan from somebody else so as to cover his drawings from his own company;

(6)  If the alleged loan was really for the purchase of the 9A Flat, H had not explained why he had to ask Mr JGS for the money so urgently (see his message as quoted above: “I need today”), as the payment for the flat was not made until 9 May 2019.

244.  The WhatsApp messages do not appear to support H’s case that he was asking Mr JGS for a loan at all.  I do not believe H’s evidence that he had had a conversation with Mr JGS beforehand.

245.  Neither would I place weight on the subsequently-added comments at the right-most column of the account statements, as they are all self-serving.  H even accepted in court that those comments may be wrong.  An obvious example is the payout of HK$3.2 million by HH HK to H. While it was stated in HH HK’s letter dated 26 March 2019 that it was an annual bonus, it was remarked in the comments column against the same amount dated 28 March 2019 as “Loan taken Property Purchase […]”.

246.  I therefore will not take this alleged liability into account when I calculate the value of family assets.

E12.2   The purported loan from NMG LTD

247.  In H’s 1^st Form E dated 24 June 2020, he claimed that he owed NMG LTD US$2.5 million.  This case was maintained in his 2^nd Form E dated 18 February 2022 and his Schedule of Assets dated 16 September 2022.  According to H’s internal vouchers, this sum was borrowed on 26 August 2019 (US$2.2 million) and 28 August 2019 (US$300,000).

248.  However, in H’s 3^rd Form E dated 21 December 2023, the debt owed to NMG LTD was increased to US$4.7 million, equivalent to HK$36,723,685 (after taking into account a repaid sum of US$300,000).   It is alleged that H had mistakenly omitted to mention in his earlier Form Es another loan granted by NMG LTD on 4 January 2019 in the sum of US$2.5 million. 

249.  He explained in his Answers dated 5 October 2020 and 22 February 2024 that the loans obtained from NMG LTD in August 2019 were for the purpose of repaying the funds (US$2,502,230 (HK$19,394,284.28)) which were borrowed from HH HK for the purpose of lending to Sister (i.e. the Sister Principal Amount).

250.  I do not accept H’s case on this liability nor his explanations.

251.  Firstly, by any standard, US$2.5 million is a lot of money.  It is inconceivable that H would have forgotten to mention such a large amount of debt in his Form E if such loan really existed.  This is particularly incredible if H’s litigious attitude in these proceedings is taken into account.

252.  Secondly, H alleged that no loan agreement had been signed at all for the alleged loans. It is incredible that such large loans were made without loan agreements.

253.  Thirdly, in H’s Answers, he alleged that even the terms of repayment had not been settled. Again, this is incredible, if those were really loans.

254.  Fourthly, as explained above, I would not give weight on the “comments” which were entered in HH HK’s account statements as they are self-serving. 

255.  Fifthly, H had not produced NMG LTD’s account statement until May 2024, and even then most of the narratives had been redacted. 

256.  Sixthly, when he was cross-examined by H’s counsel as to why he had to redact the statements, he alleged that it was because he had not sought consent from his client. However, that explanation is contradicted by another document in relation to NMG LTD’s account, which was unredacted.

257.  Seventhly, when H was asked why he did not disclose the “Know Your Client” documents in relation to NMG LTD, he explained in court that it was because he was in a dilemma in that he did not know whether the documents would end up be disclosed to the public.  However, when he was asked to clarify on this, he admitted that that reason was not in his mind at the time of non-disclosure.  In my view, H is simply the sort of witness who would say whatever he could think of to defend his own position without caring whether such evidence is the truth or not.

258.  To conclude, H has failed to establish that he owed NMG LTD the alleged sum of US$4.7 million.

E12.3   The purported loan from Mr AK

259.  H alleged in his 1^st Answers dated 5 October 2020 that:

(1)  he owed a Mr AK a sum of AED8,000,000;

(2)  there was no loan agreement;

(3)  the purpose of the loan was to provide working capital to _________________________________ (“PIE”) for its operation in Dubai;

(4)  the funds were deposited into the account of PIE from
NMG LTD which is beneficially owned by Mr AK, and that PIE was leased by H and a client of HH HK;

(5)  the loan was repayable on demand.  Mr AK has subsequently demanded repayment of the loan because W had contacted clients of HH HK and informed them that H and HH HK are in financial difficulties.  Upon H’s request, the repayment due date has been extended to December 2020.

260.  I do not accept H’s evidence.

261.  Firstly, it is inherently improbable that a large loan of the sum equivalent to more than HK$17 million would not be backed up by any written loan agreement.  Even though H alleged that Mr AK is his close friend, he also accepted that Mr AK is a pure businessman, and would not lend H money without benefit[17]. 

262.  Secondly, H’s evidence on this alleged loan is self-contradictory:

(1)  While he told this Court during cross-examination that Mr AK was to be repaid a percentage of profits to be made, he had never mentioned this before, particularly when he was asked about the terms of this alleged loan in the 1^st Questionnaire (which he replied by his 1^st Answers);

(2)  In H’s oral evidence, he originally alleged that when the loan was granted, the percentage of profit which he would share with Mr AK was not confirmed, and they would discuss and decide on the percentage when the company started to produce profit.  However, he subsequently stated that the percentage had been agreed when the loan was granted.  Worse still, he had given different percentages in his oral evidence.

263.  H alleged that he could not recall clearly because he had had a few loan agreements with Mr AK.  However, that actually reinforces my view that if there were indeed loan agreements as such, H and Mr AK would have put them down in writing.

264.  Thirdly, I agree with W’s counsel that H’s evidence on profit sharing with Mr AK is more consistent with the latter being an investor rather than a lender of a personal loan to H.  This is supported by H’s own record dated 2 September 2018 in which there was a description of “total investment by [AB] and Me”.  If Mr AK was purely a lender, there was simply no need for his name to be mentioned there.

265.  Fourthly, H alleged that, after the 1^st extension of time of repayment, the due date was December 2020.  If that is the truth, then it is unbelievable that, 4 years since then, there was not a single letter or written message from Mr AK chasing for repayment. 

266.  Even if H had lost all his data in his mobile phone as alleged, given his alleged close relationship with Mr AK, it should not be difficult for him to ask for a copy of such message(s).  I do not accept that the email dated 16 January 2023 issued by NMG LTD to him was related to the alleged loan as it did not say so.  Further, as mentioned, the email was issued under the name of NMG LTD rather than Mr AK himself.  Even if Mr AK is the beneficial owner of NMG LTD, I do not think Mr AK, a “pure businessman” as described by H, would have mixed up his own capacity when he issued that email.

267.  Fifthly, H admitted that Mr AK had paid him a sum of US$246,997 on 5 September 2018, and that this sum was related to PIE.  That is totally inconsistent with his case that he was owing Mr AK money at the material time.

268.  Sixthly, while on one hand, it was alleged by H that “H’s Form E lists the loan to (sic) [Mr AK] as a total of AED8 million.  This corresponds to the amount invested in [PIE]”[18], H also alleged that he had borrowed AED8 million from HH HK for the same purpose[19]. Again, his case was contradictory.

269.  To conclude, I do not accept that H is indebted to Mr AK as alleged.

E12.4   The purported loan from HH HK

270.  H alleged that he owed a sum of HK$8,538,789.25 to HH HK as on 13 December 2023[20].

271.  W relied on a number of reasons to argue that the Court should not take this alleged amount of liability into account.  To summarise, it was said that:

(1)  As H is the founder, CEO and 98.5% shareholder of HH HK, he could take funds out of the company as and how he chose;

(2)  H was free to decide how to classify his withdrawals from HH HK.  That explains why the alleged loan is not supported by the audited reports of HH HK;

(3)  H has used “year end reversals” in the HH HK account statement to manipulate the accounts;

(4)  The account statements provided by H are also unreliable.

272.  H’s counsel argued that:

(1)  As HH HK is a separate legal entity and a financial institution regulated by the Customs and Excise Department of Hong Kong, H could not withdraw any amount freely as alleged;

(2)  H’s reversals are short term and not reflected in the audited financial statement;

(3)  The relevant entries and reversals had been provided to the auditor, who issued a clean audited report after verifying all ledger and voucher entries;

(4)  If the loans which H had with HH HK are written off, then the receivables due to HH HK that were logged in its financial statements become null and void.  However, the single joint expert had valued HH HK with these receivables recorded.  In other words, the receivables would decrease significantly if the sums recorded as being due are cancelled.  W cannot have it both ways.  If the Court accepts W’s arguments, that would render the valuation done by the single joint expert (which has been agreed by both parties) incorrect.

273.  I am of the view that, since H is the CEO and 98.5% shareholder of HH HK, he has all along been at liberty to withdraw money from HH HK whenever he wished.  The only constraint on the withdrawal is, of course, the financial circumstances of the company at the time of withdrawal.

274.  Be that as it may, if he had indeed taken money out of HH HK as loans, there is no reason why such liability should not be taken into account when his net assets are ascertained.

275.  I would tend to think that the figures and the original descriptions of the entries in the HH HK’s account statements are accurate, even though I maintain that the comments which were added subsequently in the right-most column thereof are unreliable and as to which I would not give any weight.

276.  The “year end reversals” as shown in the account statements in fact support my finding that the figures in the HH HK’s account statements are accurate.  Take 2018 as an example.  On 31 December 2018, it was recorded that H owed HH HK the sum of HK$16,880,326.39.  Then on the same day, there was a credit entry for a sum of HK$19,585,000.  The balance thus became a positive one, in the sum of HK$2,704,673.62.  On 2 January 2019, there was a “reversal of voucher” in the sum of HK$19,585,000 (i.e. identical to the credit amount on the previous working day), and as a result, the outstanding amount which H was indebted to HH HK on 2 January 2019 rose to HK$16,880,326.39 again.  It is obvious that H was manipulating the entries so as to achieve the purpose of bringing down the 2018 year end balance in his account, and as a result, no loan was recorded to be owing from H to HH HK as at 31 December 2018 in HH HK’s audited financial statements.  The same operation was conducted at the end of 2017 and 2019[21]. In my view, if the account statements were inaccurate, H did not have to do such “reversals” in such statements, as he could have made some inaccurate entries therein so that his debit balance would not rise to sky-high in the first place.

277.  I also agree with H’s counsel that, as a matter of principle, if the Court simply wipes out the liability which H was said to owe to HH HK on the basis of W’s argument, that would be quite unfair, because the single joint expert had valued HH HK with the receivables recorded, which would have a consequential effect on HH HK’s value, which has been agreed between the parties for the purpose of this trial. 

278.  However, even if the Court should not disregard the entirety of H’s alleged liability owed to HH HK, should the Court accept the entirety of it?

279.  In my view, the reverse of the argument of H’s counsel is also true. It must be borne in mind that, as the account statements show, the amount of loan which H obtained from HH HK fluctuated a lot. Therefore, if H’s liability to HH HK is taken to be much more than the level of receivables at the time of the valuation, then that would also affect the agreed value of HH HK.  As H’s counsel put it, H “cannot have it both ways”[22].  Hence, in my view, it would not be right for the Court to take H’s liability to HH HK as HK$8,538,789.25 which is the figure as at 13 December 2023. 

280.  The figure which the Court should adopt should be the amount of H’s liability at the time of the valuation. 

281.  The valuation done by the single joint expert reflects the value of the HH Group as at 31 March 2022[23].  According to the calculation table of the single joint expert, the “amount due from H” as at that date was taken to be HK$1.8 million[24]. That more or less matches HH HK’s account statements, which show that H was indebted to HH HK for the sum of HK$1,791,800.94[25].

282.  I therefore conclude that the amount of liability which H owes HH HK for the purpose of this trial should be taken to be HK$1.8 million.

E12.5   The purported liability from PIE to HH HK

283.  In H’s 3^rd Form E dated 21 December 2023, he stated that PIE owed a sum of HK$14,514,163.66 to HH HK which was guaranteed by him.

284.  As W’s counsel pointed out:

(1)  H did not mention this “guarantee” in his 1^st Form E dated 24 June 2020 nor in his 2^nd Form E dated 18 February 2022. Neither did he include this in his Schedule of Assets as at September 2022;

(2)  H has provided no documentary proof in support of the alleged guarantee, not to mention the loan which PIE allegedly obtained from HH HK;

(3)  The alleged loan was also nowhere to be seen from the single joint expert’s valuation report which took 31 March 2022 as HH HK’s valuation date.

285.  It should be borne in mind that, according to H’s own evidence, PIE had been wound up in April 2019 already.  Therefore, any loan obtained by PIE must have been granted before that date.  The same logic applies to any alleged guarantee in relation to PIE’s debt.

286.  In other words, the alleged liability under the guarantee must, if it really existed, have been there already at the time when H filed his 1^st Form E.  Yet, as aforesaid, it was not mentioned at all.

287.  In fact, even H accepted in his Answers dated 22 February 2024 that “PIE did not owe HH any funds prior to liquidation”[26].

288.  H’s counsel did not deal with this “guarantee” at all in H’s closing submissions.  Neither did H reply to W’s closing submission in this regard.

289.  On the other hand, it seems that, confusingly, H alleged that the liability in the sum of HK$14,514,163.66 was arrived at in the following way:

“I borrowed AED8,000,000 (HK$16,999,737.83) from HH for my investment in PIE. Judgment in Cassation Appeal No.943/2021 in UAE was made my favour against [MM] in the amount of AED8,003,214.49 (HK$17,006,568.52). [MM] held PIE on [H]’s behalf. Judgment will attach to [MM]’s property in UAE ([MM] has no other assets) valued at AED2,669,700 (HK$5,673,025.01) which will be sold at auction. After the sale and repayment of a mortgage liability against the property of AED1,500,000 (HK$3,187,450.84), I may recover around HK$2,485,574.17. Therefore, the outstanding liability to HH will be HK$14,514,163.66, subject to the amount recovered at auction […]”[27]

290.  The so-called liability of HK$14,514,163.66 stated above and the alleged guarantee in the same amount must be referring to the same thing.  However, it is a mystery as to how it can be said that H is liable to HH HK by virtue of a guarantee.  It is also beyond imagination as to how it can be said that PIE was indebted to HH HK in such circumstances.

291.  It is therefore my conclusion that such an alleged guarantee should not be taken into account in the present exercise.

E12.6   The purported loans from Sister

292.  H alleged that he had obtained 2 loans from Sister: HK$500,000 in June 2021 and HK$200,000 in March 2022.

293.  In his 5^th Affirmation, he explained that:

“25. I previously relied on borrowing from HH to fund the deficits in my expenditures but I am no longer able to do so as HH is financially unable to provide further funding to me. In 2022, I have already borrowed HK$2,024,655.94 from HH […]

26. To fund my income deficit, I have resorted to loans from banks, friends and [Sister] […]”

294.  H’s evidence is totally incredible, and I do not accept the same.

295.  At the material time, Sister was still admittedly indebted to H for the Sister Principal Amount.  It is therefore inherently improbable that H would have asked her for loans in 2021 and 2022.

296.  Furthermore, it can be seen from HH HK’s account statements that by 20 December 2023, H had a debit balance in his HH HK account for more than HK$6.1 million.  It shows that it was not a problem for him to owe HH HK for the sum of more than HK$2,024,655.94. 

297.  In fact, H’s counsel did not advance a single argument in H’s closing submission on this alleged liability.  Neither did H respond to W’s submission in H’s reply written submission in this regard.

298.  For the above reasons, I refuse to accept H’s case on his alleged liability to Sister.

E13.  W’s liabilities (Issue 19)

E13.1   The judgment debt owed to Standard Chartered Bank

299.  It is evident that, on 5 May 2023, Standard Chartered Bank commenced an action at the District Court against W, and subsequently obtained judgment on 1 August 2023 (“the DCCJ Judgment”) for the sum of HK$386,770.68 with interest and costs.

300.  W now claims that she is indebted to Standard Chartered Bank for a total sum of HK$463,640.48.

301.  In H’s closing submissions, he did not challenge the aforesaid sum.  The only argument which he made is that W has “financially irresponsibly prioritised ‘repaying’ family and friends above a genuine debt, despite the significant interest accruing daily”, and therefore “H should not be responsible for this liability which W has irresponsibly allowed to accrue”[28].

302.  There is simply no reason why the Court should exclude such liability when it is a genuine debt.

E13.2   The outstanding legal fees to W’s former solicitors

303.  W claimed that her legal fees owed to her former solicitors in these proceedings amounted to HK$479,168.8.

304.  As a matter of principle, I do not think legal fees incurred in these proceedings should be taken into account as W’s liability.  

305.  Indeed, W has not claimed that the fees which she owes her current solicitors should be treated as her liability for the present purpose.  That being the case, why should the fact that she has changed solicitors make a difference?

306.  I would therefore disregard this item.

E13.3   The purported loan granted by Father

307.  W alleged that she has had to borrow from Father since these proceedings started, and she now owes him HK$280,000.  She has provided the receipts from her former solicitors to show that the sums had been paid to them.

308.  If the loan from Father had been used to pay off her former solicitors’ fees, then I do not think that loan should be taken into account for the present purpose, for the same reason as explained under Section E13.2 above.  I do not agree that the Court should treat the legal fees of W’s former solicitors differently merely by reason of the fact that the expenses had been paid by virtue of a loan which W obtained somewhere else.

E13.4   The purported loan granted by W’s sister

309.  It is W’s case that she owed her sister for the sum of HK$745,000. As W explained in the letter dated 27 June 2022, she received the loan through money transfer service and through a friend (SZ). She had provided related cheques, transfer record, and messages in support.

310.  It is evident that HK$411,000 out of the said loan was obtained to settle the outstanding fees of W’s former solicitors.  This sum should therefore be excluded.

311.  I do not accept H’s argument that this was a soft loan.  As H’s counsel accepted, W had indeed repaid part of the loan in the past. 

312.  I will therefore take the sum of HK$334,000 as W’s liability to her sister.

E13.5   The purported loan granted by W’s friend D

313.  W’s case is that her debt to D amounts to INR 300,000 (approximately HK$30,000).

314.  W explained that the debt was used to pay off outstanding maintenance fees of the Spaze ITech property and electricity bills in December 2022, and she has provided a bank transfer slip dated 19 December 2022 in support, on which the transaction was remarked as a loan.  In my view, this is not a soft loan, otherwise D would not have made such a remark on the transfer record.

315.  I therefore accept that this sum of HK$30,000 should be included as an item of her liability.

E13.6   The purported loan granted by W’s friend SR

316.  W stated that she still owes HK$5,000 to her friend SR, and she has provided the relevant bank records showing the payments.

317.  I accept that this sum of HK$5,000 should be included as an item of her liability.  It is not a soft loan, as it can be seen that W had asked her brother for another loan for the purpose of repaying SR.

E13.7   The purported loan granted by W’s friend SS

318.  W claimed that she owed her friend SS for the sum of HK$45,000, and she has provided some transfer records and bank statements in support.

319.  This is not a soft loan, as W has made some repayments.

320.  I accept that this sum of HK$45,000 should be included as an item of her liability.

E13.8   The purported loan granted by W’s brother SD

321.  W alleged that, in order to pay property tax and maintenance fee, and to partly repay SR, she had borrowed from her brother for a few times. Having repaid him for INR800,000, her outstanding debt to him currently stands at INR195,000 (approximately HK$18,269).  She has produced the relevant bank statements, payment receipts, cheques, and no dues certificates in support.

322.  I accept that this sum of HK$18,269 should be included as an item of her liability.  I do not think this is a soft loan, as it is evident that W had repaid his brother for a large sum of money.

E13.9   The outstanding legal fees in India

323.  It is W’s case that she has incurred legal expenses in defence of several sets of civil and criminal proceedings brought by H against her in India.

324.  Her outstanding legal fees in India are in the sums of HK$21,079 (in Gurgaon and Chandigarh) and HK$7,026 (in Allahabad).

325.  W has not produced any documentary proof in support of these claims at all, which is quite unusual, because she must have received invoices for the legal fees from her lawyers in India.

326.  I would therefore disregard these claims.

E14.  The total assets (Issue 20)

327.  Having taken into account the Agreed Scott Schedule dated 28 June 2024 as well as the findings above, I summarise the total assets of H and W as follows:

	Held by W	Held by H	Held by others
Landed Properties
Jointly owned property in India	HK$0
Spaze I Tech Park	HK$1,511,708
The 9A Flat		HK$4,127,495
The 12D Flat			HK$1,929,805
Bank Accounts
Hang Seng Bank	HK$0
India Overseas Bank Joint accounts	HK$1,689
Citibank No.xxxxxx39	HK$47,866
Citibank No.xxxxxx21	HK$10,550
SC (India)	HK$135
BEA		HK$10,077
Bank A		HK$6,707
HSBC		HK$319,807
Bank B		HK$136
Bank C		HK$3,856
SC (India)		HK$4,993
ICICI Bank (India)		HK$4,671
Private companies
73.4% of BLPL	HK$0
26.33% of BLPL		HK$0
98.5% of HH Group		HK$88,256,000[29]
HH HK		(included above)
HH Australia		(included above)
HH India		(included above)
HH Singapore		(included above)
HH China		(included above)
HH ME		(included above)
HH USA		HK$86,000
50% of BTHKL		HK$2,400,000
XLTD		HK$0
DIS (UAE)		HK$7,200,000
STH LTD		HK$0
BSP Limited			HK$46,000
Insurance policies
Life Insurance Corp. of India No.xxxxxxxx3	HK$5,741
Life Insurance Corp. of India No.xxxxxxxx4	HK$5,341
Life Insurance Corp. of India No.xxxxxxxx5	HK$4,974
Life Insurance Corp. of India No.xxxxxxxx6	HK$4,637
Life Insurance Corp. of India No.xxxxxxxx2	HK$8,598
Life Insurance Corp. of India No.xxxxxxxx1	HK$9,459
Manulife No.xx-xxxxx40-3		HK$387,197
Manulife No.xx-xxxxx21-7		HK$39,605
Manulife No.xx-xxxxx81-9		HK$28,313
Manulife No.xx-xxxxx87-9		HK$224,196
Debtors
S		HK$166,840
Judgment debt from [MM]		HK$2,486,250
Valuable personal items
Jewellery	HK$35,000
MPF
AIA – Prime Value Choice	HK$159,430
AIA - Manulife	HK$13,509
AIA – Prime Value Choice		HK$652,780
SUB-TOTAL OF ASSETS[30]	HK$1,817,792	HK$106,405,767	HK$1,975,805
Liabilities
Citibank Premiermiles Card	(HK$19,471)
Citibank Octopus Credit Card	(HK$3,831)
Citibank Rewards Card	HK$10
SCB Judgment debt	(HK$463,640)
Loan from W’s sister	(HK$334,000)
Loan from D	(HK$30,000)
Loan from SR	(HK$5,000)
Loan from SS	(HK$45,000)
Loan from W’s brother	(HK$18,269)
Loan from HH HK		(HK$1,800,000)
HSBC Premier Card		(HK$11,895)
HSBC Personal instalment loan		(HK$1,041,936)
Cash instalment loan attached to HSBC credit card		(HK$3,819)
SUB-TOTAL OF LIABILITIES	(HK$919,201)	(HK$2,857,650)
NET ASSETS	HK$898,591	HK$103,548,117	HK$1,975,805

328.  The total amount of net assets owned by H and W is therefore HK$106,422,513.

E15.  Parties’ standard of living (Issue 21)

329.  From this issue onwards, I will move to step 2 as explained in LKW v DD (supra), that is, assessing the parties’ financial needs.

330.  H is 42 and W is 38.  They married in April 2012, and separated in around 2020.  That means their marriage lasted for around 8 years.

331.  It is my finding that the parties enjoyed a very good standard of living during their marriage:

(1)  H, W and Daughter lived with H’s family as part of a 3,000 sq ft multi-generational household located in the New Territories;

(2)  They had 2 cars (Lexus and Tesla), and employed 2 helpers as well as a driver;

(3)  Their principal mode of transport was by private car and taxi;

(4)  Daughter attended international schools;

(5)  The family enjoyed 3-4 overseas holidays each year.  They usually travelled business class.

332.  H stated that the parties rarely travelled as a family, which they had done less than once a year, and that the trips which the parties did take were predominantly for H’s business, where W tagged along.

333.  In my view, it is meaningless to distinguish strictly whether a particular trip was a business trip or a family (holiday) trip.  A trip could serve dual purposes.  Be that as it may, it does not mean that the Court should disregard those business trips when, as a matter of fact, H brought his family along which the family members must have treated as their holiday.

334.  The absurdity of H’s case may be demonstrated by quoting what he stated in his 9^th Affirmation as follows:

“27. [W] and I did not travel much for family holidays. There were occasions when I went on business trips and [W] came along with me. When I was having business meetings, [W] would go sight-seeing or shopping. These were therefore not ‘family trips’ or travel for pleasure/personal enjoyment […]”

(emphasis added)

335.  In fact, H accepted in his oral evidence that Daughter also joined on practically every trip.  He said it was because she was too young at the time.  I do not accept that was the real reason.  This is because there was no evidence that W was obliged to travel with H for business purpose. In other words, W did not have to join at all, if she was required to take care of Daughter at home.  They obviously had a choice.  In such circumstances, the participation of Daughter shows that the parties treated the trips as family trips (even though H would also work during the trip).

336.  H also disagreed with W’s counsel during cross-examination that he travelled on first class in the trip in April 2018 to Dubai, saying in Court that he could not recollect:

“I cannot recollect, sir. You have to show me some tickets or something. But yes, it looks like either business class, because mostly I traveled in business class only. So, you have to show me something, sir, for me to comment on it, whether this particular picture that you are showing me is a first class or not.”

(emphasis added)

337.  In a way, by what he said, he had made an admission that he had at least normally travelled on business class, rather than economy class which he would like this Court to believe (which I do not).

338.  Further, in my view, it is more likely than not that if someone had rarely had a chance to travel on first class, he/she would have a strong impression about that experience.  To say that he could not recollect whether he was travelling on first class during that trip tends to show that it was not a rare experience for him.

339.  H also stated that they travelled economy class and would at times redeem miles for business class tickets.  This, I am afraid, is just another lie which H had no hesitation to tell:

(1)  W had produced a large number of documentary proof to show that they had travelled on business (or even first) class on many occasions.  H did not explain how come he could have so many “mileage” for the alleged redemption of so many business class flight tickets;

(2)  Indeed, in the table which H’s counsel helpfully prepared, “asia miles” was only referred to once.  That was in relation to their trip to India in October 2016.   Such kind of reference could not be found anywhere else in the table.

E16.  W’s and Daughter’s needs (Issues 22 and 23)

340.  In this and the following section, I will consider the parties’ financial needs.  While doing so, I will bear in mind what Ribeiro PJ stated in LKW v DD (supra) at [79]:

“Baroness Hale stressed that the parties’ needs should be ‘generously interpreted’. Accordingly, in trying to ensure that each party and their children have enough to supply their needs set at a level that equates, in so far as resources allow, to the standard of living they enjoyed during the marriage, those needs should not be assessed according to some perceived lowest common denominator, but with flexibility in the light of all the relevant circumstances.”

341.  I set out the parties’ respective cases on W’s and Daughter’s needs as follows:

Items	W’s case (HK$)	H’s case (HK$)
General expenses
Rent	$30,000	$23,000
Utilities	$4,000	$3,000
Management Fee	$3,450	$0
Food (wet market)	$8,000	$5,000
Household (including food from supermarkets)	$7,000	$1,000
Dependent family member	$5,000	$0
Domestic helper	$5,063	$5,080
Other: Repair / maintenance	$2,000	$0
SUB-TOTAL	$64,513	$37,080
Personal expenses
Meals out	$2,000	$2,000
Transport	$4,000	$1,000
Clothing/shoes	$2,000	$1,000
Personal grooming	$5,000	$1,000
Entertainment	$3,000	$1,000
Holiday	$10,500	$2,000
Medical	$5,500	$500
Tax	$500	$0
Insurance	$1,000	$0
Safety deposit box	$250	$0
Others: Phone, Apple subs etc	$4,000	$1,000
SUB-TOTAL	$37,750	$9,500
Daughter’s expenses
School fees	To be paid by H	$14,750
School meal	$1,300	$1,200
School projects	$1,000	$1,000
Transport to school	$12,000	$2,300
Medical	$3,500	$500
ECAs	$4,500	$1,000
Entertainment	$4,000	$1,000
Holidays	$10,500	$1,500
Clothing	$2,000	$1,000
Lunches	$200	$200
Vaccinations	$1,000	$200
Uniform	$200	$60
Others: Haircut, meals out home with MY	$3,250	$0
Others: Play Therapy	$3,200	$0
SUB-TOTAL	$46,650	$24,710
TOTAL	$148,913	$71,290

342.  I will deal with parties’ differences below one by one.

343.  Rent: W put forward property advertisements of flats in Lohas Park of around 1,000 sq ft which were asking for monthly rental from around HK$27,000 to HK$30,000.  On the other hand, H suggested that H and Daughter should opt for flats which are only around 500 sq ft, which would cost only around HK$15,000 to HK$17,000 monthly.

344.  W’s counsel emphasized that the Matrimonial Home is around 3,000 sq ft and it is a house.  I agree that that is a factor which this Court has to bear in mind.  However, it should also be remembered that the family did not live there alone during the marriage, but together with H, his parents and his siblings.

345.  I hold that a reasonable figure should be HK$28,000.

346.  Utilities: I adopt the figure of HK$3,500 as the reasonable figure.

347.  Management fee: Management fee is normally paid by the landlord of the rented property.  I would therefore not allow this item.

348.  Food (wet market): I am of the view that the reasonable monthly figure should be HK$6,000.

349.  Household (including food from supermarket): I agree that the Court should guard against double-counting of the expenses covered by this item and the preceding item.  Be that as it may, I am of the view that the figure of HK$1,000 as proposed by H is way too low. 

350.  I would take HK$3,000 as the reasonable figure.

351.  Dependent family member: I do not think it is reasonable for the Court to treat Father as a dependent family member of W.  Indeed, she accepts that there is no need for her to pay this item once she has moved out of the Matrimonial Home.

352.  Domestic helper: There is no dispute that it is reasonable for W to hire one domestic helper.  I will adopt W’s proposed figure of HK$5,063.

353.  Other: Repair / maintenance: W made reference to the repair work to the Matrimonial Home in support of this item of expenses. However, if she lives in a rented property, she should not be responsible for repair work.  I would therefore not take this item into account.

354.  I will now deal with W’s personal expenses.

355.  Transport: In support of her claim of HK$4,000 per month as transportation expenses, W produced an invoice to show that it would cost her HK$320 to travel from Kam Tin to Central and HK$240 to travel from Kam Tin to Tsim Sha Tsui.

356.  However:

(1)  She will not live in Kam Tin after her divorce;

(2)  Both parties have assumed that she would live in Lohas Park which is close to MTR Station;

(3)  There is no explanation as to why she has to travel to Central and Tsim Sha Tsui frequently.

357.  I will therefore take only HK$2,000 as her monthly transportation expenses.

358.  Clothing/shoes: The difference between the parties in relation to this item is HK$1,000: W proposes HK$2,000 whereas H suggests HK$1,000.

359.  I would take the figure of HK$1,500.

360.  Personal grooming: This is for W’s haircut, facials, manicure, pedicure and waxing.  In my view, the figure of HK$1,000 as proposed by H is unreasonably low.

361.  On the other hand, it seems HK$5,000 as proposed by W is slightly on the high side.

362.  I would adopt the figure of HK$4,000.

363.  Entertainment: This item should include “presents”.  I would take the figure of HK$1,500 as the reasonable amount.

364.  Holiday: W said she intends to travel with Daughter regularly again after these proceedings. Even so, the proposed monthly figure of HK$10,500 (i.e. HK$126,000 per year) per person is obviously excessive. 

365.  H argued that W has not travelled on business class in her recent 2 trips, including a long haul trip to Australia with Daughter, so as to justify a monthly provision of HK$2,000.  I do not accept this argument.   It should be borne in mind that this Court did not provide for a large figure on holiday when the MPS Decision was made because that was meant to be an interim budget.

366.  I hold that the reasonable figure should be HK$4,000.

367.  Medical: W and Daughter enjoyed private medical insurance during the marriage.

368.  From H’s email dated 2 September 2018, it can be seen that he had at the time budgeted HK$1.22 million for premium expenses for Daughter (for 5 years).  That amounts to more than HK$20,000 per month.

369.  W has produced a quotation to show that, for a CEO hospitalisation plan, with annual deductible set at HK$16,000, the premium would be around HK$36,800 per year.

370.  I would therefore take HK$4,400 as the reasonable figure.

371.  Tax: W has produced documentary proof to show that she had to bear property tax in relation to her property in India for the sum of around HK$31,300 annually back in 2022. 

372.  As W is only proposing HK$500 for this item, I would adopt the same in full.

373.  Insurance: W stated that she has to pay premium for the life insurance policies which she had taken out before the marriage.  She is asking for HK$1,000 per month. 

374.  She has produced some documents in support. Although those documents are quite old, I accept W’s evidence.  I will therefore take the full amount as the figure under this item.

375.  Safe deposit box: According to W’s oral evidence, she is going to cancel the safe deposit box.  I will therefore ignore this item.

376.  Others: This item covers miscellaneous items such as phone bills, toiletries, cosmetics, mobile phone subscriptions, etc.  W claimed HK$4,000 on paper, but she stated in Court that she could accept HK$2,000, whereas H suggested HK$1,000.

377.  I agree with H that HK$1,000 is what W needs.

378.  I will now deal with Daughter’s expenses.

379.  School fees: W stated in her latest Form E filed in December 2023 that Daughter’s monthly school fee was HK$14,750.  H had no objection to pay for this sum.

380.  H has given an undertaking to the Court (which was recorded in Her Honour Judge Melloy’s Decision on MPS dated 11 September 2020) that he shall pay Daughter’s school fees.  As I noted in my Decision dated 3 July 2023[31], the undertaking given by H was without an end date. 

381.  When H applied to adjust the MPS downwards in July 2022, he did not apply to be released from the said undertaking.  For the present purpose, H has not indicated that he would refuse to continue with this obligation.  All he said through counsel was that he should not be writing blank cheques for Daughter’s costs and that W has an obligation to discuss with him on Daughter’s schooling. 

382.  I can see why H had that concern, as Daughter will be graduating next year, and she will have to move to a secondary school.

383.  However, it is trite that, despite W having sole custody of Daughter, she is duty bound to consult H on Daughter’s choice of secondary school. 

384.  For the present purpose, W suggested that the monthly needs for Daughter’s education should be assessed at HK$22,674, based on the school fees and capital levy of Harrow International School, which is around HK$8,000 more than the current sum of HK$14,750.

385.  This is a reasonable amount when one considers that H himself had budgeted HK$1.5 million for Daughter’s school fees payable for 5 years back in 2018/2019[32].

386.  School meal: There is just a small difference of $100 between the parties. 

387.  W produced a bank statement to show that the meals cost HK$3,900 per term.  Assuming that each term would last for around 3 months, it seems that the figure of HK$1,300 as proposed by W is more reasonable.

388.  Transport to school: School bus services between the school and Nam Cheong Station cost around HK$9,200 per term (i.e. around HK$3,100 per month). 

389.  I do not think it is necessary for Daughter to take uber between home and Nam Cheong Station everyday as proposed by W.

390.  I have not lost sight of the fact that once W and Daughter have moved to a rented place at Lohas Park, Daughter will not need to take the school bus anymore.  However, it will apparently take a while before they can actually move to their new home.  Further, as mentioned, Daughter will graduate after this academic year, and she will then study in another school.  Her target school, as discussed above, will be quite far away.

391.  I will adopt the figure of HK$4,000.

392.  Medical: I refer to the insurance quotation which W obtained for Daughter, which shows that the annual premium payable is around HK$24,000, with annual deductible amount of HK$16,000.

393.  I will therefore adopt the figure of HK$3,300.

394.  Extra-curricular activities: W has produced invoices to show that ECAs offered by Daughter’s school would cost around HK$29,000 per year.  Daughter also attended art classes and drumming classes.

395.  I assess needs on ECAs at HK$3,500.

396.  Entertainment: While W has produced some receipts in support, it is difficult to understand what sort of entertainment W would like Daughter to enjoy after the conclusion of these proceedings.

397.  I therefore only assess this item of needs at HK$1,000 as proposed by H.

398.  Holiday: I adopt the figure of HK$4,000 as in the case of W above.

399.  Clothing: I assess such needs at HK$1,500.

400.  Vaccinations: Daughter is getting to the age by which she would no longer be required to take compulsory vaccinations.   However, it is accepted that she would still need to take vaccinations from time to time.  H proposed the sum of HK$200.  I am of the view that this is reasonable because in total Daughter would have a budget of HK2,400 for this item the whole year.

401.  Uniform: W proposed HK$200 per month, which only amounts to HK$2,400 annually, which is a reasonable figure.

402.  Play therapy: It is evident that Daughter is attending play therapy which would cost HK$1,600 per session, and that she would have to take 2 sessions per month.

403.  H objected against this item, saying that Daughter should not be attending play therapy indefinitely.

404.  However, the Court has to assess needs at the time of the trial.

405.  I would therefore adopt the figure as proposed by W.

406.  Others (e.g. haircut, meals out, etc): W claimed for HK$3,200 under this heading.  This is excessive.  I assess this item at HK$500.

407.        To summarise, my findings on the needs of W and Daughter are as follows:

Items	Ruling (HK$)
General expenses
Rent	$28,000
Utilities	$3,500
Management Fee	$0
Food (wet market)	$6,000
Household (including food from supermarkets)	$3,000
Dependent family member	$0
Domestic helper	$5,063
Other: Repair / maintenance	$0
SUB-TOTAL	$45,563
Personal expenses
Meals out	$2,000
Transport	$2,000
Clothing/shoes	$1,500
Personal grooming	$4,000
Entertainment	$1,500
Holiday	$4,000
Medical	$4,400
Tax	$500
Insurance	$1,000
Safety deposit box	$0
Others: Phone, Apple subs etc	$1,000
SUB-TOTAL	$21,900
Daughter’s expenses
School fees	To be paid by H
School meal	$1,300
School projects	$1,000
Transport to school	$4,000
Medical	$3,300
ECAs	$3,500
Entertainment	$1,000
Holidays	$4,000
Clothing	$1,500
Lunches	$200
Vaccinations	$200
Uniform	$200
Others: Haircut, meals out home with MY	$500
Others: Play Therapy	$3,200
SUB-TOTAL	$23,900 (plus $14,750/$22,674 school fees)
TOTAL	$91,363 (plus $14,750/$22,674 school fees)

E17.  H’s needs (Issue 24)

408.        H’s expenses, after removing legal costs and maintenance payments, are HK$111,585 per month. Such expenses were not challenged by W’s counsel at the trial. Neither did W make any submissions on H’s expenses in her closing submissions.

409.  I will therefore take that as H’s needs.

E18.  W’s earning capacity (Issue 25)

410.  It is undisputed that:

(1)  W has a Bachelor of Arts from the University of Delhi, India;

(2)  Following her graduation in 2008, she had worked at a global professional services firm for 2 years (approximately from 2008 to 2010);

(3)  She had also worked at a technology company providing online platform for classifieds in recruitment, matrimony and real estate until April 2012;

(4)  She then moved to Hong Kong in 2012;

(5)  Since then, up to the end of the marriage, she had only worked in HH HK.

411.  W agreed in her oral evidence that she should start looking for a job immediately.  The question is how much she would be able to earn.

412.  According to her evidence, she had been the Chief Strategy Officer of HH HK.  She had also been the Head of its Human Resources, IT and Business Development Departments.  She had received a monthly salary of HK$45,000 from HH HK.

413.  For the above reasons, it was submitted by H that W’s earning capacity is at least HK$45,000.  In fact, H’s counsel suggested further that she could earn as high as HK$70,000 per month since she had applied for a job which offered such level of salary.

414.  In my view, the level of monthly salary which W earned in HH HK should not be used as reference as to how much W can earn in the market, because H was the owner of the company and could have a say on how much his wife should receive as salary.  In fact, according to H’s evidence, W was not supposed to use the entire amount of the salary of HK$45,000 as the same was deposited into their joint account[33]. Whatever that means, that illustrates why such level of salary should not be relied upon.

415.  It is also unrealistic to suggest that W could earn as high as HK$70,000 simply because she had applied for such a job, as the indisputable fact is that she did not get that job successfully.  As W said, which I accept, she had applied for every job she could find in the human resources area, but in vain.

416.  A more reliable yardstick is the monthly salary which W received when she worked in 2023 in a recruitment firm.  At that time, she earned HK$21,000.

417.  In my view, it is not at all easy for W to get a job at all.  It is not helped by the fact that she cannot speak Cantonese.

418.  I would therefore take it that, even if W can find a job, she would not be able to earn more than HK$21,000 per month.

419.  H further suggested that the soft loans which W obtained from her family members serve as an indication that she will have ongoing financial support from her family.  With respect, I disagree.  First of all, I have found that they are not soft loans.  Secondly, I am not surprised, and it is totally understandable, that financial assistance has been given to W by her family members at her difficult time out of their love towards her. That does not mean that H may take advantage of this, which actually was caused, at least for a certain extent if not solely, by his failure to comply with the court’s order on MPS and litigation funding.

E19.  H’s earning capacity (Issue 26)

420.  It is H’s case that:

(1)  Although he had in 2018 – 2019 obtained a monthly salary of HK$240,000 from HH HK, that did not last for long;

(2)  HH HK’s performance had been affected seriously after the social events in 2019 and Covid-19 outbreak in 2020;

(3)  He is now only getting a monthly salary of HK$80,000 per month with one month double pay;

(4)  He has had different health conditions since 2019 which affect his ability to earn.

421.  Although I accept that HH HK’s business in recent years had been adversely affected by various matters, the Court should not place too much weight on the monthly salary which H received from HH HK. This is because it is his company.  He could decide how much to get from HH HK as his “salary”.   Further, from HH HK’s account statements, it can clearly be seen that he could freely withdraw from the company and treat it as his “piggy bank”.  In other words, it is evident that he did not get his source of funds merely in the name of “salary”. 

422.  This can be easily demonstrated by reference to the account statements of HH HK in 2023.  It should be noted that, by 2023, all the negative factors which affected the company’s performance had already surfaced (including the defamatory emails – see Section E22.2.1 below).  Yet, H could still withdraw money from HH HK frequently.  At the beginning of the year, he only owed the company for around HK$2.4 million.  However, during the year, he kept withdrawing money from the company for various purposes, including settling his solicitors’ bills, paying tax, and even as cash advance.  In November 2023, the debit balance had already gone up to HK$6.1 million. 

423.  To conclude, it is my finding that H has much stronger earning ability than W.

424.  I also find that, apart from H’s own evidence, there is nothing which supports H’s allegation that his health conditions have affected his ability to earn.  However, as I stated in Section D of this Judgment, I do not find him a credible witness at all.  Insofar as this particular area is concerned, I only need to refer to his evidence given in his 9^th Affirmation for demonstration purpose:

“9. I also suffer from spondylosis and arthritis since 2019. Spondylosis causes me constant back pain and doctors have advised me to undergo physiotherapy which I do not have much time for. Arthritis/osteoarthritis limits my ability to walk or sit for a longer period of time. I also have to either get Platelet Rich Plasma injections or Cortisone shots in both my knee joints every 6-12 months. Both spondylosis and arthritis causes pain in my bones. As a result, I’m not able to travel or take long business meetings freely […]”

(emphasis added)

425.  The above evidence did not state clearly since when in 2019 that H had been suffering from his medical problem.  However, according to the medical evidence produced, it is shown that he was already suffering from L5/S1 spondylitic spondylolisthesis on 13 March 2019, and as a result he was referred to have physiotherapy. 

426.  Despite what H said, what we can see from his travelling records is that:

(1)  On 13 September 2019, he could fly over to Australia with SSP for the purpose of acquiring HH Australia;

(2)  On 2 November 2019, he could travel to Malaysia and met with KL Remit Exchange Malaysia;

(3)  On 18 November 2019, he could travel to Singapore and met with Mr Abhisbek Jajoo for business related purpose;

(4)  On 14 January 2020, he could fly to Austria in which he and SSP met with Raiffeisen Bank International Austria.  He then went to UK on 20 January 2020 and met with Citibank London.

427.  H has apparently exaggerated his inability.

E20.  H’s available financial resources (Issues 27 and 32)

428.  In relation to HH HK, H submitted that:

(1)  HH HK is H’s prime financial resource which includes provision of his income;

(2)  HH HK’s successes are solely attributable to H, and the company would become worthless if he were to leave;

(3)  Although HH HK was valued by the single joint expert at HK$89.6 million (100%), this is a notional and theoretical valuation as it is highly unlikely that anyone would pay this amount for H’s shareholding (98.5%);

(4)  The value of the company has been impacted by the malicious emails and the damaged banking relationship caused by those emails.  It is thus highly unlikely that the company would or could be sold;

(5)  The single joint expert report also noted that HH HK’s financial performance has been severely affected in recent years;

(6)  When the Court assesses H’s available financial resources, it should take into account its illiquidity;

(7)  According to H’s evidence, the business of HH HK has not improved since the date of the single joint expert report, and as a result no bonuses had been paid to staff in 2023, and the headcount of the company had been reduced;

(8)  Defaults have occurred since the date of the single joint expert report and these affect HH HK’s liquidity.  Those defaults relate to debts owed by:

(a)  OTLTD (around HK$5 million);

(b)  STH LTD (around HK$3.6 million);

(c)  SWYP (around HK$4.78 million);

(d)                                                       (“DIS”) (around HK$4 million); and

(e)  BTHKL (around HK$0.93 million).

429.  I have no doubt, and there is no dispute, that HH HK is H’s prime financial resource. 

430.  I also accept that HH HK would probably be worthless if H leaves the company.  After all, he is the soul of the company – he established and built it up from day one.  He could not be replaced easily, unless the buyer is having the same connection in the market.

431.  Be that as it may, it does not mean that the Court, when calculating the value of H’s assets, should not take HH HK’s full value into account, when:

(1)  The expert had already taken into account the dramatical change in the business environment, the impact of termination of business relationships with major banks, and its decreasing trend in business profitability;

(2)  The expert had also considered the fact that no investor was willing to invest in HH HK despite its effort to look for external investors;

(3)  The expert had already chosen a valuation method which was most suitable in the circumstances, and the parties had agreed to the value as assessed by the expert;

(4)  The expert has already applied a 15% “marketability discount” (which is at the upper end of the usual range) to reflect its relatively slow process in converting its assets into cash, the reputational risk arising from the malicious emails and the fact that fewer potential buyers would be in the market.

432.  As to whether the liquidity of HH HK would have an impact on the financial resources which are available to H for satisfaction of any payment order which this Court will make, this will be taken into account when the Court decides on the schedule of payment.

433.  As for the alleged defaults of the 5 companies:

(1)  Out of those 5 debtors, only DIS was shown in the single joint expert’s report as a debtor at the time of the valuation date (i.e. 31 March 2022)[34], and at the time, it was owing HH HK HK$3 million (in other words, the debt rose by 33% within a few months, and then it was described as “default”);

(2)  Putting aside the debt of SWYP (which was also valued by the expert in the same report), at least 3 out of the other 4 debts seem to have appeared just for a short period of time before the alleged defaults;

(3)  4 out of those 5 debtors were closely connected with H::

(a)  43% in SWYP was owned by Brother;

(b)  H was 50% owner of BTHKL;

(c)  H was the 100% beneficial owner of STH LTD and 75% beneficial owner of DIS.

(4)  The “defaults” are contradictory to what was stated in HH HK’s audited financial statement for the year ended 31 December 2022:

“The expected credit losses as at 31 December 2022 and 2021 were considered to be minimal based on the Group’s assessment of the credit status and quality of the debtors.”

(5)  It should also be noted that the debt allegedly owed by BTHKL could not be seen in its audited financial statement for the year ended 30 June 2022, in which the amount due to related companies was only stated to be HK$78,402.   If by then the alleged debt had not yet been in existence, then that means such a debt had an even shorter life than the other debts referred to above, which makes H’s case even more incredible.

434.  Taking into account H’s lack of credibility, I do not think the Court should accept his argument that the liquidity of HH HK had been severely affected by reason of those alleged defaults.  The fact is that HH HK had been able to extend loans to various companies owned by H and Brother even after the alleged “difficult times”.

435.  In relation to DIS, H also submitted that the Court should take into account its lack of liquidity and poor financial prospects. 

436.  These matters have already been considered by the single joint expert in his valuation report when he arrived at the value of HK$7,200,000 (for 75% equity).  In particular, he had already applied a 15% marketability discount to reflect, inter alia, the company’s poor liquidity position.

437.  The longer time which would be required to seek potential investors in this company would, if necessary, also be taken into account when this Court considers the timing of H’s lump sum payment to W.

438.  In relation to BTHKL, it was submitted that its value is theoretical rather than practically realisable. 

439.  However, it should be noted that, according to the expert’s view, its financial performance has improved significantly since incorporation.

E21.  Applicability of the sharing principle

440.  Having undertaking steps 1 and 2 as explained in LFW v DD (supra), I am of the view that this is a case in which the sharing principle should apply.

441.  Indeed, it can be seen that the parties’ submissions and the open proposals have in essence assumed that this is a sharing rather than a needs case.

E22.  Departure from equal sharing (Issue 29)

442.  In [81] of LKW v DD (supra), Ribeiro PJ quoted Hughes LJ’s judgment in B v B (Ancillary Relief) [2008] 2 FLR 1627 at [24] as follows:

“The sharing principle gives rise to the general proposition that no distinction is to be made, when considering the contributions of the spouses to the marriage (section 25(2)(f)), between monetary and non-monetary contributions. Thus there also follows the requirement to test the outcome of the exercise against the yardstick of equality, and to depart from it only if and to the extent that there is a good reason for doing so: see Lord Nicholls in White at 605f. Lord Nicholls there expressly adverted to the fact that, more often than not, it is necessary to depart from it ... The importance of the ‘yardstick of equality’ is twofold. First it underlines the necessity not to treat financial contributions differently from those in non-monetary form. Second, it underlines the essential fairness of equal division in a large number of cases of shared matrimonial life.”

443.  His Lordship continued:

“83. The fourth step therefore involves considering whether good reasons exist for departing from the principle of equal division. Any such departure means increasing or reducing one party’s share and correspondingly reducing or increasing the share of the other. The question for the court is whether the balance ought to be shifted from a point of equality to some other point in the circumstances of the case. This is necessarily a complex question which raises a range of separate issues.”

444.  H relied on a number of reasons which he submitted are good enough to justify a departure from the principle of equal division.  I will consider those matters in turn below.

E22.1   HH HK (Issue 31)

445.  H raised the questions of whether HH HK was derived from H’s sole endeavours and therefore should be regarded as a non-matrimonial asset, and how much of the value should be included in the pool of assets for division between the parties under this issue.

446.  It is undisputed that:

(1)  H’s prime financial resource, which includes his provision of income, is HH HK, of which H is the 98.5% shareholder and the Chief Executive Officer;

(2)  H started HH HK (when it was called GECL at the time) in December 2010.  Initially the shares in HH HK were held by Sister on behalf of H.  Those shares were only transferred back to H (except 1.5% thereof which were given to Sister as a gift) on 1 September 2013;

(3)  H and W married in April 2012 in India, and they separated in around 2020.

447.  I hold the view that HH HK should not be treated as non-matrimonial asset as such by reason of the so-called sole endeavours.

448.  Firstly, HH HK was started only shortly before the parties’ marriage, and it had strived during the marriage.

449.  Secondly, when HH HK was transferred back to H, the parties had already got married.

450.  Thirdly, and the most important of all, I am of the view that whoever might have made a greater contribution to the family business can have little bearing on the outcome of this trial, as the Court of Final Appeal has made clear that there is no place for any role discrimination: LKW v DD (supra) at [57].

451.  The above analysis is applicable to DIS and BTHKL as well, especially when both these companies were established during the marriage.

452.  It should also be remembered that H had admittedly treated HH HK as his prime financial resource, and such financial resource had been used to support his family including W.  In other words, the company had been treated as a family asset.  Indeed, despite H’s alleged dissatisfaction of W’s work performance, he had given her high-rank title in HH HK as well as paid her high salary, all using HH HK’s resources.

453.  The above reasoning would have been enough to deal with H’s arguments in this regard.  However, if it is still necessary, I have no hesitation to find that it is unfair to say that HH HK’s success had been down to H’s sole endeavours as if W had no contribution thereto.  This is because even according to H’s own evidence, W joined HH HK as Senior Manager in April 2013 (i.e. not too long after she had moved to Hong Kong).  She subsequently became the Head of HR and Administration of the company and was promoted to the post of Chief Strategy Officer in January 2019.  I do not believe that W’s performance was as bad as that portrayed by H, which is quite inconsistent with how H treated her in the company.  H’s evidence that her promotion to the post of Chief Strategy Officer was out of W’s own request is also incredible, in light of his own message dated 8 November 2018 sent to W that “I am thinking to make u CSO”, which obviously shows that this promotion was H’s own idea.  In any event, there was no similar allegation made by H on W’s promotion to Head of HR and Administration. 

E22.2   W’s conduct (Issue 16)

454.  Section 7(1) of the MPPO provides that, when the Court exercises its power under sections 4, 6 and 6A, it is duty bound to have regard to, inter alia, the parties’ conduct.

455.  In  LKW v DD (supra), it has been held that negative conduct should only be regarded as a material factor if it is “obvious and gross” in the sense explained in Wachtel v Wachtel [1973] Fam 72 or if it is such that it would in the opinion of the court be inequitable to disregard it.

456.  In OG v AG (Financial Remedies: Conduct) [2021] 1 FLR 1105, Mostyn J identified 4 situations where conduct is relevant in financial remedy cases, and they are[35]:

(1)  gross and obvious personal misconduct meted by one party against the other, normally, but not necessarily, during the marriage, but such conduct would only be reflected where there is a financial consequence to its impact.  The conduct under this category can extend to economic misconduct.  If one party economically oppresses the other for selfish or malicious reasons, then, provided the high standard of “inequitable to disregard” is met, it may be reflected in the substantive award;

(2)  the “add-back” jurisprudence which arises where one party has wantonly and recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property.  It will only be in a clear and obvious, and therefore rare, case that this principle is applied;

(3)  litigation misconduct – where proved, this should be severely penalised in costs, although it is very difficult to conceive of any circumstances where litigation misconduct should affect the substantive disposition; and

(4)  the evidential technique of drawing inferences as to the existence of assets from a party’s conduct in failing to give full and frank disclosure.  The taking of account of such conduct was part of the process of computation rather than distribution. The court should strive to quantify the scale of undisclosed assets but it is not obliged to pluck a figure from the air where even a ballpark figure is evidentially impossible to establish.

457.  The Court of Appeal in LCC v LTLA (Ancillary Relief: Add-back) [2024] 2 HKLRD 1177, [2024] HKCA 406 found that, where conduct is an issue in ancillary relief claims, the two-stage approach set out by Peel J in Tsvetkov v Khayrova [2023] EWFC 130 is helpful. The slightly modified approach has been set out by the Court of Appeal in [48] of LCC v LTLA as follows:

“Stage (1)

A party asserting conduct must prove:

(i) the facts relied upon; and if established,

(ii) those facts meet the conduct threshold, which has consistently been set at a high or exceptional level; and

(iii) that there is an identifiable (even if not always easily measurable) negative financial impact upon the parties which has been generated by the alleged wrongdoing. A causative link between act/omission and financial loss is required. Sometimes the loss can be precisely quantified, sometimes it may require a broader evaluation, but it is doubtful that the quantification of loss can or should range beyond the financial consequences caused by the pleaded grounds.

Stage (2)

If Stage (1) is established, the court will go on to consider how the misconduct, and its financial consequences, should impact upon the outcome of the financial remedies proceedings, undertaking the MPPO section 7 exercise which requires balancing all the relevant factors.”

458.  With the above in mind, I will now consider the individual allegations in turn below.

E22.2.1    Malicious / defamatory emails

459.  H relied heavily on the malicious and defamatory emails which were allegedly sent by W to his business associates.

460.  In H’s 9^th Affirmation, he explained that:

(1)  In around November 2022, one of the bankers of HH HK informed him that his bank received malicious emails from aaryn12805jo@gmail.com;

(2)  The emails sent to bankers alleged that H was involved in money laundering activities;

(3)  H tried to login to the said email account and clicked on the “Forget password” option, then the page led him to the registered recovery phone number, which was a Hong Kong phone number and was shown as “**** **81” which matches W’s phone number;

(4)  H then proceeded to click on “I don’t have my phone” option, and the page led him to the registered recovery email address, which was shown as aar**************@gma**.***. Coincidentally, one of W’s email addresses is aar**.***********@gm***.com, which matches the number of character spaces denoted by the asterisks;

(5)  When H confronted W about this on the OurFamilyWizard app which they used to communicate, W did not reply and immediately deleted the said gmail account.

461.  H then instructed Ms ZB, an advocate in India who has practised for 38 years to obtain evidence of the source of the defamatory emails.  H further instructed Ms ZB that:

(1)  SSP had boasted to the business community in Dubai, including HH HK’s clients, associated companies and business associates, about circulating emails in concert with W;

(2)  SSP said that he would stop if H would pay him a certain amount of money;

(3)  In around October or November 2020, he asked a client of
HH HK, AL, to contact SSP and make a deal to stop the defamatory emails.  H had, through AL, offered SSP US$100,000 to stop the defamatory emails;

(4)  SSP was told by AL to contact Ms ZB.

462.  Ms ZB told this Court that:

(1)  On 19 November 2020, Ms ZB met SSP in her office, during which SSP stated that he sent defamatory emails to HH HK’s clients because H had terminated his job.  SSP also demanded AED1.7 million (i.e. around HK$3.6 million);

(2)  In the meeting, SSP also stated that:

(a)  he together with W would ruin H financially, and destroy his career and business; and

(b)  W was like his sister and they have worked together as colleagues in HH HK.

463.  Relying on the above, H submitted that W was involved in the defamatory emails.

464.  This was denied by W in Court.  I am of the view that she was lying when she told this Court expressly that she had nothing to do with the defamatory emails:

(1)  It is highly unlikely to be just a coincidence that both the recovery email address and the recovery phone number match W’s email address and mobile phone number.  This is particularly the case in relation to the email address, which is a long email address;

(2)  It is inherently incredible that W would ignore H’s confrontation if she was not involved in the matter;

(3)  It is again highly unlikely to be just a coincidence that the said gmail address would be deleted immediately upon H’s confrontation of W;

(4)  I have no hesitation in accepting Ms ZB’s evidence.  She is a very experienced lawyer.  Her evidence was very firm.  I cannot see why she would be willing to tell a lie for H who was only her client;

(5)  There is no evidence as to why SSP had to allege that W was also involved if that was not the truth.  Prima facie, he was standing on W’s side, as he was originally minded to be her witness in this trial.

465.  The next question is whether there is any identifiable negative financial impact upon the parties which has been generated by the alleged wrongdoing.  In other words, was there any causative link between the act and the financial loss?

466.  I have no hesitation in finding that there was such financial loss, as it was so opined by the single joint expert, who stated in his report that:

“2.1.6 [HH HK] was alleged by malicious e-mails that [H] and [HH HK] were involved in money laundering. The malicious e-mails were sent out to different banks and clients under the name of a [HH HK]’s ex-employee. Although the ex-employee confirmed that he did not send out these e-mails, these e-mails have led many major banks to terminate their business relationships with [HH] Group.”

“2.2.1 […] The termination of business relationships with major banks has also damaged [HH] Group’s reputation and increased the operating costs.”

467.  As a result, it is my view that the equality principle should be departed by reason of W’s involvement in the sending of defamatory emails.  It would be fair in the circumstances for W to share less in the family pot in light of the damage caused to H’s business.  I hold that a 10% deduction is appropriate in these circumstances.

E22.2.2    Disclosure of documents

468.  Another matter relied on by H as negative conduct on the part of W is her disclosure of confidential information and documentations from the matrimonial proceedings in Hong Kong in court proceedings in India (“the Indian Proceedings”).

469.  In the Indian Proceedings, HH HK claimed against W and her brother for the purpose of preservation of assets of Global Compliance Private Limited (“GCPL”) which was an Indian subsidiary of GCLHK, a company beneficially owned by H[36].

470.  It was said that the following documents had been disclosed in the Indian Proceedings:

(1)  A copy of H’s Form E dated 24 June 2020;

(2)  Copies of various correspondence marked “private and confidential” between H and W’s solicitors:

(a)  a copy of a letter from W’s solicitors to the HK Family Court dated 3September 2020;

(b)  a copy of a letter from W’s solicitors to H dated 16April 2020.

(3)  A copy of the divorce petition; and

(4)  A copy of the Order dated 4 June 2020 regarding W’s interim maintenance application.

(collectively, “the Disclosed Documents”)

471.  There is no dispute that the above documents had indeed been disclosed in the Indian Proceedings.

472.  However, W alleged that she was not aware that her solicitors in India had disclosed those documents.

473.  With respect, I do not accept W’s evidence in this regard.  The nature of the Indian Proceedings is totally different from the proceedings herein.  There is simply no reason for W to send copies of the Disclosed Documents to her legal representative in India in the first place. 

474.  Be that as it may, H’s counsel has not even started to identify any negative financial impact upon the parties which has been generated by the alleged wrongdoing. 

475.  I find that there is none.

476.  Hence, this is not a matter which the Court should take into account.

E22.3   Length of the marriage

477.  The marriage here lasted for around 8 years.  I do not agree that this should be described as a “short marriage” as suggested by H.

E23.  Fair outcome (Issue 28)

478.  As aforesaid, I am of the view that the Court should depart from equal sharing and that a fair outcome is that H should be entitled to 60% of the family assets, whereas W should be given 40% thereof.

479.  Under Section E14, I have found that the total assets amount to HK$106,422,513.  Hence, W should be entitled to HK$42,569,005.20.

480.  As W has net assets which worth HK$898,591, H should transfer assets which worth HK$41,670,414.20 to her, subject to the views to be expressed below.  I would round this figure up to HK$41,700,000.

481.  In my view, H should retain his private companies, as I agree that he is the key-man of his business.  Letting him hold the companies would facilitate the raising of funds.

482.  Although this would result in him getting the illiquid and risk laden assets, I do not think the Court should (further) depart from equality for that reason.  H was 42 at the time of the trial, and has now just turned 43.  Despite his medical condition, there is nothing which shows that he cannot continue to run his business. 

483.  I also hold the following views:

(1)  H should transfer his share in the jointly owned property in India to W.  The costs of the transfer should be shared by the parties equally;

(2)  H should not be ordered to transfer the 9A Flat to W nor to sell the same, as he is living there with Mother;

(3)  Sister should be ordered to sell the 12D Flat and the net sale proceeds should be paid to W as part payment of the said lump sum;

(4)  W should transfer her interest in BLPL to H. The costs of the transfer should be shared by the parties equally;

(5)  The balance of the India Overseas Bank joint accounts should be paid out to W, and the accounts shall be closed thereafter;

(6)  The parties shall retain all other assets, and be responsible for their own liabilities, whether held in their respective sole names, jointly with others, or in the names of third parties.

484.  H shall pay W the balance of HK$41,700,000, after taking into account the value of the above transfers.

485.  As the parties have indicated that they wish to address the Court on payment schedule, I will give further directions in this regard.

E24.  Maintenance to W (Issue 33)

486.  W seeks an order that H shall pay her over HK$70,000 per month for her maintenance until full payment of the lump sum which the Court shall order. 

487.  I have assessed that W’s monthly needs should only be HK$44,681.5 (HK$45,563/2 + HK$21,900).  I would round that up to HK$45,000.

488.  It will be seen below that this Court will order H to make a lump sum payment to W.  However, that unavoidably would have to be satisfied by instalments, and it may take a while before the final order may be made, since parties have requested to have the chance to make further submissions on payment schedule upon their perusal of this Judgment. 

489.  I am of the view that, in the meantime, W’s needs have to be provided for by H’s monthly payments.  However:

(1)  I do not agree that H should be ordered to make monthly payments to W until full payment of the lump sum.  In my view, provided the first instalment to be made by H is not of too small an amount, her immediate needs should have been taken care of by such a payment, even if it will take a while for the lump sum payment to be fully made.  Having said that, that is not a matter which can be decided right now.  I will leave the time of cessation of monthly payment to be further dealt with when this Court gives its ruling on payment schedule;

(2)  The monthly payment to W should only be in the sum of HK$45,000.

E25.  Maintenance to Daughter (Issue 34)

490.  W seeks an order that H pays, until Daughter reaches 18 or ceases full time education, whichever is later:

(1)  her educational expenses (including tuition fees, capital levy, school trips, extra tuition, school activities, trips and camps) upon presentation of invoice; and

(2)  child maintenance to W of HK$78,900 per month.

491.  According to this Court’s assessment (see Section E16 above), putting aside Daughter’s school fees, her monthly needs should be around HK$46,681.5 (HK$45,563/2 + HK$23,900).  I would round that up to HK$47,000.

492.  Taking into account the respective earning capacities of the parties as well as W’s own needs, I am of the view that H should be ordered to be solely responsible for the whole sum. 

493.  I therefore order that H shall pay W for Daughter until she reaches 18 or ceases full time education, whichever is later or until further order:

(1)  Her school fees (including capital levy) upon presentation of invoice; and

(2)  Periodical payment in the sum of HK$47,000 per month.

494.  I have limited the education expenses to school fees and capital levy because the other educational items have already been taken into account when this Court assessed Daughter’s needs and when the figure of HK$47,000 was arrived at.

F.   DISPOSITION

495.  I make the following orders:

(1)  The declarations and orders sought by W by virtue of her Points of Claim filed on 7 July 2021 in relation to WIRE LTD, its subsidiaries and the 2021 Extension Agreement are dismissed;

(2)  A declaration that H and W were at all material times and remain the beneficial owners of the 12D Flat, which has been held under Sister’s name on trust for them;

(3)  A declaration that H was at all material times and remains the beneficial owner of 100% of the shares in BSP Limited which are held by the 3^rd Intervener and the 4^th Intervener on trust for him;

(4)  The application for declaration and order sought by W pursuant to her Points of Claim filed on 7 July 2021 in relation to 43% of the shares in SWYP is dismissed;

(5)  H shall make a lump sum payment upon/after the date of the Decree Absolute (to be made by instalments) to W in the total sum of HK$41,700,000, subject to the deduction of HK$844 (i.e. W’s share in the balance of the joint accounts in India Overseas Bank) and the net sale proceeds of the 12D Flat;

(6)  Upon full payment of the aforesaid lump sum, W’s claims for ancillary relief shall be dismissed;

(7)  H shall transfer his share in the jointly owned property in India to W within 28 days after the date of the Decree Absolute, and the costs of the transfer shall be shared by the parties equally;

(8)  Sister be ordered to sell the 12D Flat within 3 months after the date of the Decree Absolute, and the net sale proceeds shall be paid to W;

(9)  W shall transfer her interest in BLPL to H within 28 days after the date of the Decree Absolute.  The costs of the transfer should be shared by the parties equally;

(10)  The balance of the India Overseas Bank joint accounts shall be paid out to W within 28 days after the date of the Decree Absolute, and the accounts shall be closed thereafter;

(11)  H shall pay for Daughter’s school fees (including capital levy) upon presentation of invoice until she attains the age of 18 or ceases full time education, whichever is later;

(12)  H shall pay W HK$47,000 per month as maintenance for Daughter.  The first payment shall be made on 1 September 2025 and thereafter on the 1^st day of each and every subsequent month until Daughter attains the age of 18 or ceases full time education, whichever is later;

(13)  Paragraph 1(1) of the order dated 3 July 2023 (on maintenance pending suit) be varied to a monthly sum of HK$45,000 with effect from 1 September 2025 until further order;

(14)  Paragraph 1(2) of the order dated 3 July 2023 (on interim maintenance) be discharged forthwith;

(15)  Paragraph 2 of the order dated 3 July 2023 (on litigation funding) shall continue to have effect until further order.

496.  Parties shall seek to agree on the precise wordings of the above orders.  They shall also seek to agree on the necessary further order/directions to bring the above orders into effect.  They have liberty to apply.

497.  Parties shall use their best endeavours to agree on the schedule of payment.  In case they cannot reach consensus on such schedule, they shall agree on the directions to be sought from this Court for the purpose of the determination of the schedule of payment.

498.  Parties shall lodge the draft order and draft directions for approval within 28 days from today.

499.  In the event the parties are unable to agree on the order and/or the directions, each party should submit his/her respective draft order/direction within 7 days after the said 28-day period, giving reasons for disagreeing with the other party’s draft.  I will thereafter determine the matter on the papers, unless a party raises an objection to such a course, with supporting reasons.

G.   COSTS

500.  Having taken all the circumstances into account, I hold the preliminary view that I should make no order as to the costs in all the proceedings herein.

501.  In relation to the AR trial, the following circumstances are relevant:

(1)  Both H and W have succeeded and failed in a number of issues.  In my view, there is no clear cut “winner” at the end of the day;

(2)  W has unreasonably insisted to pursue her claim in relation to companies which have been assessed to have nominal value;

(3)  W has unreasonably pursued unmeritorious claims at the trial;

(4)  H has given untruthful evidence in court which should not be condoned;

(5)  W has not been totally truthful.

502.  As between W and Sister, there were 2 issues, namely, WIRE LTD and the 12D Flat.  Both of them succeeded in one issue and failed in the other.

503.  As between W and Brother, the issue is the beneficial owner of SWYP.  W’s counsel agreed during closing submissions that the Court does not have to resolve the issue as initially proposed, because of the nominal value assessed by the expert.  However, when the Court decides on the costs issue, it would need to take into account the merits of the claim. 

504.  In this regard, it is noted that Brother accepted in his oral evidence that all the monies of investment in SWYP actually came from H.  There is also an email sent by Rajeshwer Singh by which H was informed that SWYP was formed.  However, Brother was not one of the recipients of the email.  While he said he should have got a similar email covering the same matter, he had never produced it for the purpose of these proceedings.

505.  I therefore consider that W has a very strong case against Brother.

506.  At the end of the day, W has decided not to pursue this claim, because of practical reason.  However, that decision should have been made much earlier, since the valuation report had been available back in August/September 2022.

507.  In these circumstances, I am of the tentative view that there should be no order as to costs between W and Brother.

508.  As between W and the 3^rd and 4^th Interveners, even though W has succeeded in her claim, it is noted that BSP Limited has only been valued at HK$46,000.  Taking into account the total value of the family pot, I hold the view that W should not have proceeded with this claim at all long time ago. 

509.  To conclude. I make a costs order nisi that there be no order as to the costs among H, W, Sister, Brother, the 3^rd Intervener and the 4^th Intervener (including all costs reserved).

510.  The above order nisi shall become absolute in the absence of application to vary (which, if any, will be disposed of on paper) within 14 days hereof.