BRIAN LAWRENCE KING v. JULIE CAROL KING

IN THE COURT OF APPEAL

Headnote

1986, No. 159
(Civil)

Divorce - ancillary relief - judge's discretion in making order for - desirability for wife and children to remain in matrimonial home - creditors' claims not necessarily preferred to that of wife and children.

IN THE COURT OF APPEAL

1986, No. 159
(Civil)

Dates of hearing: 3rd, 4th, 6th and 27th March, 1987.

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JUDGMENT

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1. This is the judgment of the Court on Mrs. Julie Carol King's appeal against Mr. Justice Mayo's order for ancillary relief made in divorce proceedings between herself and Mr. Brian Lawrence King.

2. It is not necessary for the purpose of this appeal to repeat the unhappy incidents which culminated in the divorce. Suffice it to say that the decree nisi was made absolute in December 1986, and Mr. King is now married to a Mrs. Thompson, with whom he had been cohabiting some two years prior to his divorce.

3. The appeal centres on that part of Mr. Justice Mayo's order dealing with the disposal of a property owned by Mr. King at Sai Kung here in Hong Kong and another property jointly owned by Mr. and Mrs. King in Cheshire, England. The order was based on and in terms similar to an offer made by Mr. King's solicitors in a letter dated 7th November 1986. In effect the order obliges Mr. King to transfer his beneficial interest in the Cheshire property to Mrs. King whilst allowing Mr. King to retain the ownership of the Sai Kung property. In view of Mrs. King's own legal costs in the court below, which came to some quarter of a million dollars, the solicitors' offer made on behalf of Mr. King was "to enable her to payoff her costs". It was the intention of Mr. King to sell his property at Sai Kung to payoff part of his very substantial liabilities as on 7th November 1986. Such liabilities came to $844,347, of which $468,000 was his own legal costs and $139,000 income tax. In addition he had undertaken to pay Mrs. King $30,000 forthwith for removal expenses, and a lump sum of $200,000 on or before 7th November 1989 in respect of her loss of entitlement under the Provident Fund provided by his employers, the Cathay Pacific Airways. His available assets were $693,638.

4. An issue which assumed great importance at the hearing below was the alleged dissipation of family assets by Mr. King in incurring these huge legal costs. The question of dissipation was of course highly relevant to the exercise of the judge's discretion when making financial arrangements for the parties and their two young children. The evidence on this matter was considered with great care by the judge and at the end he came to the view that Mr. King's legal costs were justified and there was no dissipation. Nothing which has been said by Mrs. King indicates that the judge's finding of fact was wrong.

5. Mrs. King's five grounds of appeal seek to challenge-the judge's order in a number of ways, namely, (1) that he was wrong in taking Mr. King's legal costs into account, (2) that he ought to have held that Mr. King had dissipated family assets, (3) that he placed excessive weight upon Mr. King's financial obligations toward third parties, (4) that he erred in holding that the duration of the marriage was a short one, and (5) that he failed to place sufficient weight on the value to Mrs. King of the benefits which by reason of the dissolution of the marriage she will lose the chance of acquiring.

6. We have given anxious consideration to these grounds, and also a number of new facts relating to Mr. King's terms of employment and agreed by counsel on his behalf and remind ourselves of the general principle that an appellate court will not interfere with the trial judge's exercise of his discretion unless he had acted on erroneous principles.

7. We are also mindful of what the judge said below. He said: "I realise that making this order will have the unfortunate consequence of uprooting Mrs. King and the children. I do not see any alternative to making such an order". In the light of Mr. King's financial situation nor do we. He referred to Mullard v. Mullard (1982) 3 F.L.R. 330 where Balcombe J. said (at p.332):

“For my part I would say that, in the case of a broken marriage of this kind, the ability for the wife and the children to remain in the matrimonial home, if that is possible, is an important factor to help the children, in particular, weather the stresses and strains caused by the breakup of the marriage, so that I would not lightly contemplate a move unless that were essential and inevitable.”

8. And he continued:

“While it is perfectly true that this court has to take into account any liabilities that a party to the marriage may have, it does not seem to me right that the court, exercising this particular jurisdiction, should necessarily prefer the claims of the creditors to those of the wife and children …”

9. It is a most difficult case. As Lord Fraser pointed out in G. v. G. (1985) 1 W.L.R. 647, at 651, in most of these cases there is no right answer, and all practical answers are to some extent wrong. Very often whatever the court decides for the parties and their children is wrong. In the circumstances, we see no ground for interfering with the judge's exercise of discretion in making the order as he did.

10. In the course of the hearing of this appeal Mrs. King sought to submit a scheme whereby she could obtain a 100% mortgage loan from Wayfoong Finance Company to enable her to purchase the property at Sai Kung. The hearing was therefore adjourned for affidavits to be filed with a view to satisfying this Court that the scheme was viable and acceptable. When hearing was resumed three weeks later, all that this Court had was an affidavit from one of the two different proposed guarantors. The agreement sought from Wayfoong Finance Company was not forthcoming. The relevant witness would not attend Court for cross-examination; in those circumstances such affidavit as he has filed we would hesitate to read. The position is that we do not have a viable scheme for the purchase of the Sai Kung property.

11. We observe the willingness of Mr. King to pay the $200,000 ordered to be paid in 1989 forthwith and also $75,000 for removal costs: vide para. 18 of Mr. King's affidavit sworn on 25th March 1987. We think this is to Mr. King's credit and should resolve the predicament in which Mrs. King now finds herself.

12. For the foregoing reasons, the appeal is dismissed.