KWC v. LYY

FCMC 14968 / 2006

   IN THE DISTRICT COURT OF THE

   HONG KONG SPECIAL ADMINISTRATIVE REGION

   MATRIMONIAL CAUSES

   NUMBER 14968 OF 2006

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BETWEEN

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J U D G M E N T

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A. INTRODUCTION

1.  This is an application for ancillary relief by the Petitioner (‘H”) against the Respondent (“W”). He is seeking 50 % of the parties assets existing at the time of their separation in 1998.

2.  W relies on a Chinese Agreement dated 3 February 2000 and signed by the parties and she seeks a dismissal of all H’s claims.

B. BACKGROUND

3.  H was about 23 years old and W about 21 when they first met in 1976. She was at that time working for her mother’s company which was selling second hand vehicles and operating car parks, and H was selling second hand vehicles to the company. As their relationship developed, about a year after the parties met, in 1977, H became employed by W’s mother’s company. Later that year, on 12 September 1977, the parties got married.

4.  Their daughter (“ML”) was born a year later, and she is now 30 years old. Their son (“S”) was born 3 years later in 1981, and he is now 28 years old.

5.  After marriage, H and W started a business selling second hand cars. Then, later, through the referral by W’s mother, the parties rented a property at Ngau Tau Kok (“Ngau Tau Kok Property”) where they started their own business operating car parks (“KW Car Park”). They started to do well, and using W’s words, they became rich.

6.  They bought their first home at Jubilee Garden in Shatin (“Jubilee Garden Flat”) about 2 years later in 1986. Later in 1988, they sold the Jubilee Garden Flat, and moved to a rented flat for about a year. In 1989, they bought another flat at Dragon Court (“Dragon Court Flat”) as their matrimonial home.

7.  The parties’ car park business continued to flourish, and in May1993, they bought the Ngau Tau Kok Property through a company called XXXX (“K”), but sold it within a short period of time, in fact a matter of weeks, as a confirmor, making substantial profits (“K Profits”).

8.  By that time, they were in the final stages of their application for emigration to Canada, which was about to be approved. In June 1993, they sold Dragon Court Flat, and later in September that year, the entire family emigrated to Vancouver. At the time of their emigration, according to W, they brought with them cash of about CAN $700,000, which was made up of sale proceeds of Dragon Court flat and their other savings (“Family Fund”) (A:591). The K Profits were kept in Hong Kong.

9.  Shortly after the family arrived in Vancouver in 1994, they bought a house as their family home (“Vancouver House”), and two cars for their use. They also bought two other flats as investments, which I shall call the 1^st Flat and the 2^nd Flat respectively. The 1^st Flat was sold at the original price to a friend 3 months after its purchase, leaving the 2^nd Flat, which was rented out until its sale. The two flats were registered in the sole name of W, but they were bought with money from the Family Fund.

10.  It was W’s case that not long thereafter that H started to gamble at casinos. It would appear that H soon became bored with living in Canada, and about a year later, in October 1994, he decided to move back to Hong Kong. In December that year, he invested in a printing business (“Printing Business”), and later in March 1995, he invested in another business in Mainland China trading in handbags (“Handbag Business”).

11.  According to W, in about 1995 H started womanizing in the Mainland, as a result of which she was infected with a sexually transmitted disease from him. This was not denied by H. W was naturally greatly upset by this. She had to undergo medical treatment and was also diagnosed to be suffering from depression at about that time.

12.  Towards the end of 1995, H withdrew from the Printing Business and his Handbag Business also failed. H then decided to return to Vancouver and he worked in a grocery store there for about 3 months. The parties’ relationship was, however, starting to deteriorate at this time.

13.  Sometime in 1996, W discovered she had a tumour on her finger and, according to her, she returned to Hong Kong for about 3 to 4 months in the summer of 1996 to undergo surgery which resulted in amputation of one of her fingers. At about this time, W lent a sum of money to her uncle (“Mr. L”). The parties have now agreed that the amount was HK$2.5m (“the Loan”).

14.  In early 1997, H again decided to move back to Hong Kong. He worked for a short while with Mr. L in Mr. L’s car park business, but left after about a year. It was not denied by H that at this time, he was going frequently to Macau to gamble.

15.  Soon after H moved back, in April 1997, he bought a flat at Po Tak Mansion (“Po Tak Mansion”) as his residence. This was bought in the joint names of the parties, but they eventually decided to sell it towards the end of the year. The sale was completed in February 1998. At about the time they were selling Po Tak Mansion, the parties decided to buy another flat (“Belcher Court Flat”) as their matrimonial home in Hong Kong, although at the time, W had not yet actually moved back to Hong Kong. The Belcher Court Flat turned out to be their last matrimonial home, since their separation took place a few months later.

16.  In fact, it was W’s case that by late 1997 H was womanizing in Macau, and he further cohabited with one woman in Macau.

17.  Eventually, according to W, on about 22 April 1998, H moved out of their Belcher Court Flat. It is, however, H’s case that the parties’ separation only started some time in June 1998. Anyway, not long after H moved out, W decided to move back to Hong Kong .

18.  After moving back to Hong Kong, W started her own business with her brother, again operating car parks. As the children were at that time still studying in Canada, W would commute between Canada and Hong Kong to visit them.

19.  On 11 June 1998, H signed a Power of Attorney in favour of W in relation to the Belcher Court Flat (“1^st PA”). Then, in late 1998-early 1999, H signed another Power of Attorney (“2^nd PA”) in favour of W in relation to the Vancouver House. The Vancouver House was eventually sold in 1999.

20.  H said that by late 1999, he did not have sufficient money to use. It was also W’s case that at about this time, H started to keep requesting money from her.

21.  W said due to H’s constant requests for money, in early 2000, the parties signed a separation agreement in Chinese (“Agreement”). The Agreement was dated 3 February 2000 (“Agreement”) and W is now relying on this Agreement to ask this Court to dismiss H’s claims. There was a dispute as to when H actually signed the Agreement, as he said it was in March 2000, and not 3 February 2000. I will deal with the circumstances of the signing of the Agreement and the contents thereof later in this Judgment.

22.  In 2001, the parties’ daughter ML graduated from university in Vancouver, and moved back to Hong Kong. A year later, in 2002, ML started to have hearing problems. According to W, ML’s hearing problems were caused by H hitting her, and further such problems have resulted in ML not being able to hold stable employment in Hong Kong. I am of the view that there was no sufficient medical evidence to support W’s allegation. Eventually, in about September 2006, ML returned to Canada and later that year or early 2007, she found a job there.

23.  According to W, ML has only 10% hearing ability in her left ear, and 60% in her right ear. At present, ML needs to wear a hearing aid, and according to W, she would also like to undergo cochlear implantation, which could cost about HK$200,000 according to information ML obtained from the Union Hospital in Hong Kong. It is W’s case that she is still helping to support ML.

24.  The parties’ son S also returned to Hong Kong in 2002 after his graduation from university, although he continued his studies and obtained a MBA in 2005.

25.  The parents’ separation has clearly affected the children’s relationship with their father. H himself admitted that he hardly saw the children after separation and only spoke to them on the telephone sometimes. S has filed an affirmation to support his mother’s case, and he has further appeared in the trial to give evidence on behalf of his mother. He and his mother clearly have a close relationship. S has just married, but at the time of the trial, he, his wife and his mother were still living in the same flat.

26.  After the signing of the Agreement, W’s 2^nd Flat was sold in July 2000. She, however, did not sell the Belcher Court Flat until December 2004.

27.  Eventually, more than 8 years after their separation, on 29 November 2006, H issued a divorce petition in which he applied for various forms of ancillary relief. He subsequently issued a Form A on 24 February 2007 to proceed with his application for a lump sum order. On 16 April 2007, he obtained a Decree Nisi which was made absolute on 27 July 2007. The parties then attended a Financial Dispute Resolution which was unsuccessful.

C. THE PARTIES’EVIDENCE

28.  H had filed a total of 2 Form Es , one supporting affirmation, and a chronology :

(i)  1^st Form E filed on 6 February 2007

(ii)  2^nd Form E filed on 12 June 2007, but relating to period from 1 January 1994 to 31 December 1998 (as then directed by HH Judge Remedios)

(iii)  An affirmation filed on 24 April 2007

(iv)  A chronology filed on 29 February 2008 (“H’s Chronology”)

29.  W had filed a total of 3 Form Es, one supporting affirmation, and a chornology:

(i)  1^st Form E filed on 13 February 2007

(ii)  2^nd Form E filed on 7 May 2007, but relating to period from 1 January 1994 to 31 December 1998 (again, as then directed by HH Judge Remedios)

(iii)  3^rd Form E filed on 10 December 2008

(iv)  An affirmation filed on 28 May 2007

(v)  A chronology filed on 3 March 2008 (“W’s Chronology”)

30.  W’s former sister-in-law, Madam Lai, and S each filed an affirmation supporting W’s case.

31.  All the deponents attended trial to give oral evidence and were cross examined and I had an opportunity to observe the demeanour of the parties and their witnesses. For the avoidance of doubt, insofar as the matters set out in this judgment differ from the evidence of the H or W, this is because I have preferred the evidence of the other party or another witness, as I have had the chance of observing the demeanour of the parties and witnesses, or because I consider that the documents produced confirm my finding of fact.

32.  W’s solicitor, Mr. Cheng, has subjected H to lengthy cross examination and after the initial cross examination, H was recalled and cross examined on 4 further separate occasions. Mr. Cheng has attacked H’s credibility. One of the matters relied on was H failed to produce bank statements from 2000 to 2006. I note, however, that H was never asked to produce such statements, nor was W. After the first part of the trial, H did obtain further statements up until April 2002 regarding his personal savings account at Hang Seng Bank. Although H’s evidence during the trial was confusing and contradictory at times with his Form Es and affirmation, I do not find him evasive as alleged by Mr. Cheng. W’s evidence was also confusing and contradictory at times with her Form Es. My overall impression of both parties was that with the passage of time, their memory had faded somewhat.

D. MAIN ISSUES

33.  H is now seeking 50% of the family assets existing at the time of the parties’ separation, and his Counsel, Ms Ng, has submitted in paragraph 15 of her Closing Submission that this Court should give no weight to the Agreement on the ground that:

(i)  The family assets acquired before the separation (“Family Assets”) were not covered;

(ii)  The Agreement was to H’s disadvantage, not a fair bargain;

(iii)  Parties not acted on it;

(iv)  Unequally bargaining power and undue pressure;

(v)  Lack of legal advice.

34.  W’s case is that H should be entitled to nothing as under the Agreement, he had agreed to allow W to keep all the Family Assets, and in any event, he had half of the Family Assets at the time of separation.

35.  The main issues which appear to me are therefore:

(i)  The identification and valuation of the Family Assets

(ii)  What weight should be given to the Agreement

(iii)  Whether H should be entitled to 50% of the Family Assets

a. The identification and valuation of the Family Assets

36.  Mostyn QC, sitting as a deputy High Court Judge, has said in paragraph 10 in the case of Rossi v Rossi [2006] EWHC 1482 (Fam), “in all ancillary relief cases now, a primary function of the court is to identify the matrimonial and non-matrimonial property”. In the present case, Ms Ng has submitted that the the date of the parties’ separation being a cut-off date and Family Assets be valued as at that date. As I have pointed out to the parties’ legal representatives, in Cowan v Cowan (2001) EWCA Civ 679, this approach was, however, not agreed by Lord Justice Thorpe (para 132) and he held that the assessment of assets should be at the date of the trial. Further, in Rossi v Rossi, Mostyn QC has stated that the statue requires all the assets to be valued at the date of trial.

37.  As indicated above by Mostyn QC, the “matrimonial property” and “non-matrimonial property” needs to be identified. Throughout the proceedings, H was only seeking one half of Family Assets acquired before the date of the separation, which clearly would be “matrimonial property”. H did not put forward any argument that that after separation, W had taken matrimonial property that existed at separation and traded with it and achieved a significant profit. I thus take this to mean that he accepts that any accruals or acquisitions after separation were to be treated as “non-matrimonial property”. H is not seeking any share of the non-matrimonial property.

38.  In the present case, one of the parties’ major disputes was what their Family Assets consisted of at the time of their separation, and what such assets consisted of at the time of the Agreement. I will first of all try to identify the Family Assets, before considering the Agreement, as one of the issues relating to the Agreement was what assets were covered by the Agreement.

Separation Date

39.  As mentioned earlier, there was a dispute as to when the parties’ separation actually began. H had pleaded in his petition that the parties separation was since 24 June 1998. Their son S, in his affirmation, said he came back to Hong Kong around March/April 1998 for one week, and that a few weeks after he left Hong Kong, his father moved out of the matrimonial home without notice to any one. However, in the 1^st PA, which bears the date of 11 June 1998, H’s address was still given to be that of the Belcher Court Flat. The 1^st PA was prepared by a firm solicitor. Anyway, W did not defend the petition, and a Decree Nisi was granted to H based on this fact. Thus, for all intents and purposes, I will regard their separation to have commenced formally sometime around 24 June 1998, as stated in H’s petition, even though H could have moved out earlier.

Family Assets at time of emigration in September 1993

40.  In order to try and ascertain as to what the Family Assets consisted of at the time of the parties’ separation in 1998, I find it helpful to start with trying to find out the parties’ Family Assets at the time of their emigration in September 1993, when the parties were in happier times.

41.  It is not disputed that at the time of the parties’ emigration their real properties in Hong Kong had been sold, and that the Family Assets consisted mainly, if not all, of liquid assets or cash. H had given several versions as to what he thought was the value of such liquid assets at the time of the family’s emigration to Canada. He had first said in his 1^st Form E that the parties had about HK$10m of assets, but then during the trial, under cross-examination, H had said that it was over HK$10m and he eventually said it was HK$14m.

42.  Looking at the Record of Landing issued by the Immigration Department of Canada (B:564), the parties had money in their possession of Can $620,000 when they landed on 11 September 1993. During the trial, H had said that at the time of emigration they had further invested another Can$150,000 in a Canadian fund. W agreed and she herself had said during the trial that the total money they took to Canada should be the sum of Can$ 620,000 plus Can $150,000, i.e. Can $ 770,000, but later, they lost some money in the Canadian fund, and ended up with only about Can $700,000, which formed the Family Fund. At the then exchange rate of about Can$1 to HK$5.87, the amount of Can$770,000 would be almost HK$4.52m, and the amount of Can $700,000 would be about HK$4,109,000.

43.  It was W’s case that in or about 1992, which was about a year before the parties’ emigration, that she had about HK$1.5m cash in her personal accounts and that H had about HK$2, which later she said was HK$2 to $3m in his personal accounts. This was denied by H. However, according to W’s Chronology, it appears that she was referring to a period BEFORE the parties had bought the Ngau Tau Kok Property through K. (B:591).

44.  Further, according to W’s Chronology (B:591), she herself had said that Dragon Court Flat was sold on 1 June 1993, and the net sale proceeds were exchanged to Canadian dollars. Although W’s evidence during the trial changed somewhat, according to W’s Chronology, the parties then opened a joint bank account in Canada, and had transferred the said sale proceeds to this joint bank account, and both H and W deposited further sums to form the Family Fund. Thus, including the investment in the Canadian fund, the Family Fund would be about HK$4.52m. The Dragon Court Flat was sold for HK$3.1m. It was purchased in the sum of HK$1,230,000 in October 1989, with a mortgage loan. It was W’s case that there was still an outstanding mortgage. If that was the case, it would seem that the net sale proceeds could be only about HK$2.5m, assuming very roughly the original mortgage loan being about 70% of the purchase price, and part of it having been paid off over the years. This would mean that the parties must have deposited further sums of about HK$ 2m into the Family Fund.

45.  It can be seen from statements produced by H of his personal savings account with Hang Seng Bank (“ H’s Personal Savings Account”) that on 20 August 1993 there was a sum of HK$1.6m transferred from a time deposit, which was then transferred out on the same day, again to a time deposit. On 2 September 1993, there was a deposit of HK$3.8m, which was transferred from the K savings account with Hang Seng Bank (B:516). On 2 September 1993, the month of the parties’ emigration, a sum of HK$2.5m of the HK$3.8m was transferred out by H to be placed in a time deposit. This was probably the Time Deposit 001 in the parties’ joint accounts with Hang Seng Bank (“HS Joint Accounts”).

46.  On 2^nd of September 1993, there were also 2 large transfers of HK$600,000 and HK$350,000 respectively out of H’s Personal Savings Account (B:384), to unknown destinations. W had said that in connection with the sale there was a sum of about HK$500,000 which had to be paid to her younger brother, commission charges to agents totaling another sum of about HK$1m, and a sum of HK$800,000 to Mr. Wong, a director of K, which had to be paid out of the K Profits. These came to about HK$2,300,000. One could see that there were some cheque payments totalling HK$795, 000 out of K current account on 3 September (B:520), but no other large transfers or payments out can be seen from the K accounts apart from the tax payment which was some time later. There was no marital discord at this time, and the 2 large transfers out of H’s Personal Savings Account on 2 September 1993 could be in connection with expenses relating to the sale as H had said such expenses were paid out of H’s Personal Savings Account except Mr. Wong was paid by cheques. Anyway, I find that there was no sufficient evidence that H had transferred the said amounts of HK$950,000 to any other undisclosed personal accounts.

47.  H also transferred another HK$117,800 on 3 September 1993 for “money exchange”, which probably was part of the cash taken to Canada. Also, a sum of Can $ 250,000 was withdrawn on 9 September 1993 upon maturity of a fixed deposit in H’s personal name with HSBC (B:506), which would be about HK$1,467,500 at the then exchange rate. H’s evidence during the trial was that this sum of Can $250,000 was taken to Canada and deposition into the parties’ joint accounts with Royal Bank of Canada and HSBC Canada. I accept H’s evidence in this regard. There was no marital discord at the time. Thus, although H did have about HK$2-3m in H’s personal accounts, I accept his evidence, namely that apart from sums which he had transferred to HS Joint Accounts, or the K accounts, the other sums withdrawn from H’s personal accounts in foreign currency at the time were transferred out to form part of the Family Fund which was taken to Canada.

48.  After the above transfers, there was only a small balance of about HK$32,000 left in H’s Personal Savings Account at the end of September 1993. H had 3 other accounts at the time with HSBC. From the available statements (B:498-505), there did not appear to be any significant sums in these accounts, with HK$63,000 odd in a multi-currency account on 9 September 1993. Thus, the total balance in H’s personal accounts at the time after emigration would appear to be about HK $95,000.

49.  In W’s Chrolonogy, it was her own case that both she and H had deposited further sums to the Family Fund, in addition to the sale proceeds from the Dragon Court Flat (B:591). As I have found earlier that about HK$1.5 m was transferred by H into the Family Fund, with about HK$2.5m from the Dragon Court Flat, I can only assume that the remaining HK$500,000 odd of the Family Fund could have come from W.

50.  W had said she herself had about HK$1.5m in her personal accounts in about 1992. During the trial, she then said by the time of the emigration in 1993, she had about HK$2m in her personal accounts. H’s case was that all monies were part of the Family Assets. W’s case was, however, that after the marriage, the parties had all along been financially independent and that they used to pay all the daily expenses of the family on 50-50 basis.

51.  After the parties’ marriage they were working together in a second hand car trading business “AG” which was registered in H’s name until the commencement of KW Car Park. All along, the parties were working together in the same business. At that time, the parties appeared to be happily married, and I tend to accept H’s evidence that the parties did not separate their finances in the way W described. Even if W did have money in her personal bank accounts, in my view, this should be part of the Family Assets, as was H’s money in his personal accounts. Further, the purchase price of all their properties, including the down payment, for the purchase of the Ngau Tau Kok Property, must also have come from their Family Assets.

52.  W disclosed about 3 to 4 personal accounts in her 2^nd Form E relating to the period from 1/1/94 to 31/12/98, but she said she could not recollect the then balances in these accounts. In any event, there was no mention by her at the time that she had about HK$1.5m or $2 m in her personal accounts. I have said earlier, about HK$400,000-500,000 of the Family Fund could have come from her, and if this were the case, then after emigration, by January 1994, I am of the view that W would not still have as much HK$1.5 or $2m in her personal accounts in Hong Kong. Further, as it was the parties’ then intention to leave Hong Kong permanently and to settle in Vancouver, I believe that like H, it is more likely than not that she would not have kept substantial sums in her personal accounts at the time of emigration.

53.  I thus find there was no sufficient evidence that W still had substantial savings of about HK$1.5m-HK$2m kept in her personal accounts in Hong Kong at the time of the parties’ emigration.

54.  The Ngau Tau Kok Property was bought on 13 May 1993 in the name of K for about HK$10m and it was sold by K as confirmor shortly thereafter, i.e. on 1 June 1993 for about HK$17m. This was shortly before the parties were to leave for Canada. There were taxes and other expenses and payments which K would have to pay. This no doubt would require time to sort out. It was not disputed the K Profits remained in Hong Kong at the time of the emigration, and the monies were initially credited into the K savings account with Hang Seng Bank. It could be seen that on 29 July 1993, a sum of HK$3,421.077.44 was credited and on 31 August 1993, another sum of HK$4,494,040 was credited, totaling HK$7,915,117 (B:516). These probably consisted of the K Profits. Such sums were then transferred out, namely HK$3.4m to a time deposit on 30 July 1993, HK$630,000 to K current account, and HK$3.8m to H’s Personal Savings Account, as earlier mentioned, and as I said earlier, a sum of HK$2.5m was then probably transferred to Time Deposit 001of the HS Joint Accounts (B:384).

55.  Although there was no evidence as to the original source of the time deposit of HK$1.6m on 20 August 1993 credited into H’s Personal Savings Account, W had said that the sale proceeds from the Dragon Court Flat were handled by H. Dragon Court Flat was sold on 1 June 1993 and thus it could not be ruled out that this HK$1.6m could be part of those sale proceeds. Anyway, the said sum of HK$1.6m was transferred out on the same day to form another time deposit. One cannot tell exactly to which time deposit, but it could not, however, be ruled out that this time deposit of HK$1.6m, combined with the time deposit of HK$3.4m from the K savings account, totaling HK$5m, eventually formed the Time Deposit 002 in the parties’ HS Joint Savings Account.

56.  It therefore appears that after the sale of the Dragon Court Flat and the Ngau Tau Kok Property, at one stage there was cash of about HK$8,680,000, as seen from the above transactions. Out of this, HK$7.58 m was placed in the 2 Time Deposits 001 and 002 in the HS Joint Accounts. The balance in December 1993 in the HS Joint Accounts was about HK$7.58m.

57.  To summarise, I am of the view that the parties’ Family Assets at the time of their emigration in September 1993 consisted mostly of liquid assets, which would be at least about HK$12 m as follows:

(i) Family Fund, originally (including the investment of Can$150,000 in the Canadian Fund)	Can$770,000/HK$4.5m
(ii) Balance in the HS Joint Bank Accounts (as per statement of December 1993(B:423))	HK$ 7.58m
(iii) Balance in all H's personal accounts including HSBC, approximately	HK $95,000
(iv)Balance in W's Personal Accounts	unknown but not substantial

After emigration: the Family Fund in Canada

58.  As mentioned earlier, after the family arrived in Vancouver, they bought the Vancouver House as their family home, and it was not disputed that the purchase price of Can $438,000 was paid from the Family Fund. They also bought two cars for Can $60,000, again out of the Family Fund. As the 1^st Flat in Vancouver was sold shortly after it was bought, this property could be ignored for present purposes. A sum of Can $30,000 was paid for the down payment of the 2^nd Flat, and the rental income was used for its mortgage repayments.

59.  All in all, after the purchase of the Vancouver House and the cars, and the 2^nd Flat, the balance of the Family Fund of Can $700,000 would be only about Can$202,000. At the then exchange rate, this would be about HK$1,185,740. It was not disputed that after the parties took up living in Vancouver, they relied on the Family Fund for their living expenses. Neither H nor W worked at that time. It was W’s case that between 1995 and 1998 the total expenses of the family were about HK$2,344,000 (P-7, A:274). This amount was agreed by H. Thus, whatever monies remaining out of the Family Fund, after the purchase of the Vancouver House, the 2^nd Flat, and the 2 cars, would have been depleted by the parties’ separation in1998, and in fact there should be a shortfall of about HK$1,158,260 (“Shortfall”).

After emigration: Monies kept in Hong Kong

60.  I now turn to the monies kept in the parties’ HS Joint Accounts in Hong Kong at the time of the parties’ emigration, which was about HK$7.58 as mentioned above.

61.  H had produced time deposit statements of the HS Joint Accounts from January 1994 until 22 September 1995. From such statements, it could be seen that by end of January 2004 (B:423), the total sum of about HK$7.58m was still held in the two time deposits in the parties’ HS Joint Accounts, namely Time Deposit 001 of about HK$2.52 m, and Time Deposit 002 of about HK$5.06 m.

62.  Thereafter, during the period from January 1994 to 22 September 1995, the balance in the HS Joint Accounts were drastically reduced from the said HK$7.58m to about HK$3.962m, with a total sum of about HK$3,618,000 having been withdrawn/transferred.

63.  Some of the statements of the HS Joint Accounts were missing, and it is not easy to try and trace all the destinations of the time deposits, upon maturity. Doing roughly the best I can, I find that about HK$753,000 could be traced to H’s Personal Savings Account and further a sum of HK$1,350,000 was paid to H’s printing business. The transactions were as follows:

(i)  On 21 February 1994, a sum of HK$600,000 was transferred out of Time Deposit 001 to H’s Personal Savings Account (B: 453), leaving about HK$1.4m in Deposit 001. Later on 21 February 1994, H transferred a sum of HK$578,300 back to the term deposit (B:385), thus he kept about HK $22,700 in H’s Personal Savings Account.

(ii)  On 14 March 1994, a sum of HK$1.5m was transferred to H’s Personal Savings Account, leaving only about HK$3.6m in Time Deposit 002 (B:465), but later on 15 March 1994, a new term deposit of about HK$950,000 was placed in the HS Joint Accounts (Deposit 006).  This sum was transferred out of H’s Personal Savings Account (B: 385).  However, H also transferred a sum of HK$568,500 on 15 March 1994 to a time Deposit (B:385), but this was not reflected in the HS Joint Accounts, and the eventual destination cannot now be ascertained.

(iii)  On 28 November 1994, a sum of HK$155,214.70 was transferred to H’s Personal Savings Account from the HS Joint Accounts (B:460)and thereafter, various sums were withdrawn, with destinations unknown.

(iv)  On 28 December 1994, Time Deposit 001 with principal and interest in the sum of HK$1,306,544.52 was transferred out,  HK$1.3m being transferred to the joint current account on 29 December 1994(B:462), and HK$6,544.52 was transferred into H’s Personal Savings Account (B:463).  The sum of HK$1.3m could be the sum which eventually found its way to the K Savings Account, from which HK$1,201,179.45 was withdrawn on 25 March 1995 to pay the profits tax arising out of the K Profits (B:528).

(v)  On 29 December 1994, a sum of HK$1,350,000 was withdrawn from the joint current account to H’s Printing Business by a cheque, which appeared to be signed by H (B:331).

64.  To summarise, out of the total amount of HK$3,618,000 withdrawn/transferred out of the HS Joint Accounts, a sum of about HK$1,203,473 was withdrawn for the tax payment on the K Profits, and of the remaining sum of about HK$2,414,527 (“Remaining Sum”), a sum of about HK$ 753,000 was traced to H’s Personal Savings Account, with ultimate whereabouts unknown, and HK$1,350,000 was for H’s investment in the Printing Business. The whereabouts of the balance of the Remaining Sum of about HK$300,000 were unknown.

65.  According to W, H had told her that he lost HK$1m over the Printing Business (B:593), but at the trial H maintained that when he eventually disposed of his interest in the printing factory to the other shareholder, he was repaid the sum of HK$1,350,000 in about August 1995. H’ evidence during the trial was that the refunded capital of HK$1,350,000 was initially credited into H’s Personal Savings Account, and then transferred back to the HS Joint Accounts.

66.  From the available statements, one could see that on 16 May 1994, there was still about a sum of HK$7m left in the fixed deposits (B:427) in the HS Joint Savings Account, but by 18 November 1994, there was only about HK$6m left (B:427). Thus, about HK$1m seemed to have “disappeared” during the period between 16 May 1994 and 18 November 1994. The statements of this period were unfortunately missing. However, later on, onecould see from the statements a sum of HK$1.2m re-appearing on 9 May 1995 to form Deposit 009. The source of funds of this sum of HK$1.2m was stated to be from a “bridge account” of Hang Seng Bank (B: 485, 771), but it is not clear whether this sum originated from.

67.  The sum of HK$1.2m appeared to be the only substantial sum which was placed in a new time deposit in 1995, but this was in May and not in August 1995, when H said the refund of the capital from the Printing Business of HK$1,350,000 was made to him. The sum of HK$1.2m could also be the re-appearance of the “disappeared” earlier sum of HK$1m.

68.  H admitted during the trial that he was largely responsible for operating the HS Joint Accounts, except when W was in Hong Kong, she would also operate the HS Joint Accounts. W denied she had ever operated the HS Joint Accounts. In fact, at one stage she seemed to deny having any knowledge of the HS Joint Accounts. This was, however, not possible, since W was a signatory and the HS Joint Accounts were opened before emigration when there was no marital discord.

69.  After the Printing Business, H invested in the Handbag Business in about February 1995. It was W’s case that she was told by H’s friend that H lost another HK$1m in about 12 month’s time over the Handbag Business, and further W was told by H’s friend that another friend borrowed a sum of HK$200,000 from H but had refused to repay the sum to H (A:593). During the trial, H only admitted having lost only about HK$700,000 to HK $800,000 in the Handbag Business. H further maintained that the capital for his Handbag Business, like the capital for the Printing Business, was withdrawn from the HS Joint Accounts.

70.  One could see from the above that least HK$2.1m out of the HS Joint Accounts were withdrawn by H during the 21 month period from January 1994 to 22 September 1995 and went into H’s Personal Savings Account. I accept that during this period the HS Joint Accounts were mostly operated by H. Assuming HK$700,000 to HK$800,000 were the losses over the Handbag Business, there was a total sum of about HK$1.3-HK$1.4m which went into H’s Personal Savings Account during the 21 month period. H had said the monies withdrawn by him would be expended on his personal or family expenses. I t was W’s case that H had lost such amounts on gambling.

71.  It was not disputed and as mentioned earlier, that apart from the taxes, the parties had to pay about HK$500,000 to W’s younger brother, and commission fees of about HK$1m, and another HK$800,000 to a Mr. Wong, one of the two directors of K (the other one being H). It cannot now be ascertained as to when these other expenses were paid, i.e. whether such expenses were paid in September 1993, or earlier, or during the 21 month period mentioned in the preceding paragraph.

72.  The K savings account was closed on 28 September 1995 and the last transaction in the K current account was in June 1996, after which the account remained inactive and thereafter probably closed. The KW Car Park current account continued until 24 February 1995. H did arrange for sums to be credited into these accounts to pay for miscellaneous expenses such as Business Registration fees and other disbursements relating to those K, and KW Car Park. During the aforesaid 21 month period, there were in particular 2 transfers totaling HK$90,000 from H’s Personal Savings Account into the KW Car park current account for some expenses (B:556, 557).

73.  Having considered the above, I find that there was no sufficient evidence that H had lost all the withdrawn sums with unknown destinations on gambling. I accept H’s evidence that any sums withdrawn from H’s Personal Savings Account would have been spent on his personal and family or other reasonable expenses.

Post September 1995: the amount of HK$3.962m

74.  H returned to live in Canada at about end of 1995, having failed in both the Printing Business and the Handbag Business. There were no statements of the HS Joint Accounts available after 22 September 1995.

75.  The amount of the Loan to Mr. L has now agreed by the parties to be HK$2.5m. H’s case was that this sum was withdrawn by W from the HS Joint Accounts and this should be sometime in 1996 when W was in Hong Kong for 3 to 4months for her operation. Further, H said during the trial that the purchase of Po Tak Mansion in April 1997 also came from the HS Joint Accounts, and that the balance of monies in the HS Joint Accounts was used on family expenses. W’s case was that the HK$2.5m came from her personal savings.

76.  Although in W’s Chronology, she said it was 1995, she later said it was in 1996, that she came back to Hong Kong for the surgery over her finger, and was here for about 3 to 4 months. According to H’s evidence during the trial, he was at that time in Canada, and that one day W had telephoned him to ask him whether she should lend the said sum to Mr. L , and he told W that he would let her decide. It was H’s case that during that occasion or on other occasions W was in Hong Kong, she also would operate or deal with the HS Joint Accounts, which was operable by either of them, and the HK$2.5m came from the HS Joint Accounts.

77.  Although W maintained that the HK$2.5m came from her personal accounts, even on W’s own case, she did not have as much as HK$2.5m in her personal accounts. Anyway, I have earlier found that by the time of the parties’ emigration, W did not have substantial amounts in her personal accounts in Hong Kong as alleged by her. Further, W did not dispute that part of H’s evidence that she telephoned him to consult him about the Loan, and I would have thought she would not need to telephone him if such monies came from her own personal savings. Having considered their evidence, I therefore believe that some part of the Loan to Mr. L came from the HS Joint Accounts.

78.  According to H, the purchase price of Po Tak Mansion was paid from the HS Joint Accounts. The purchase was in about April 1997, but no statements from the HS Joint Accounts for that period are now available. Although W did say she contributed HK$500,000 towards the purchase of Po Tak Mansion, as indicated in the subsequent part of this Judgment, I find her evidence in this respect confusing, and I accept H’s evidence that the purchase price of Po Tak Mansion of HK$1.8m plus other purchase expenses came from HS Joint Savings.

79.  After the Loan to Mr. L and the purchase of Po Tak Mansion, I am of the view there would be not be any substantial sums left in the HS Joint Accounts.

80.  The main account in HS Joint Accounts was closed on 6 June 1997 and the last fixed deposit matured on 15 July 1997 (B:777). This would be about a year before the parties’ separation.

Family Assets at the time of separation in 1998

81.  It is now not disputed that there were two repayments of the Loan by Mr. L, one was of HK$500,000 in early 1997, and the balance of HK$2.5m was repaid at about end of 1997. According to W, apart from operating car parks, Mr. L was also operating a finance company, and that was why she lent him the money or rather placed the money with him in the first place to obtain a high interest rate. At one stage in 1996/1997, when H returned to Hong Kong, H was employed by Mr. L to work in his car park business, and it appeared that H was offered some shares in the business by Mr. L.

82.  W said she was initially receiving HK$25,000 per month as interest on the loan from Mr. L, and later, after the first repayment of HK$500,000, she was receiving HK$20,000 per month as interest. She said she would collect such interest from time to time whenever she was in Hong Kong. During the trial, W had mentioned the total interest paid by Mr. L was about HK$900,000. It seems that W could have been confused since at HK$20,000 or $25,000 per month interest, the Loan would have been made almost 4 years ago in 1994 which was not W’s case. Anyway it was not clear into which account W was crediting such interest payments. In view of the fact that as earlier mentioned, there was the Shortfall, upon the Family Fund being exhausted, I assume that W could have used some of the interest she received on the family expenses.

83.  So far as W’s evidence regarding the repayments from Mr. L was concerned, I have to say I find her evidence very confusing. In her 2^nd Form E, W had said there was a repayment of HK$500,000 from Mr. L which she paid to H for the purchase of Po Tak Mansion. However, such sum could not be identified from the bank statements of H’s Personal Savings Account. Later, during the trial, W tried to clarify her evidence and from what I could gather, she seemed to be saying that the payment of HK$500,000 was an accounting exercise, namely Mr. L setting off the value of H’s shares in Mr. L’s carpark business against this sum, in which case, no actual cash was in fact paid by W towards the purchase of the Po Tak Mansion, and then she seemed to be saying that the sum was paid by Mr. L to H. Whatever, no such credit could be seen from H’s Personal Savings Account.

84.  In fact, during cross-examination, W had agreed that the purchase of Po Tak Mansion was paid out of Family Assets as they had not yet separated. Anyway, I have earlier accepted what H said, namely that the purchase price of Po Tak Mansion came out of the HS Joint Accounts.

85.  When Mr. L repaid W HK$2m, being the balance of the Loan towards end of 1997, W had claimed in her 2^nd Form E that HK$500,000 out of this HK$2m was used for the purchase of the Belcher Court Flat. The sale of Po Tak Mansion was completed in February 1998 and it was sold for HK$2,330,000. The Agreement for the purchase of the Belcher Court Flat was signed by H on 8 December 1997, with the sale being completed on 13 February 1998. Belcher Court Flat cost HK$2,398,000. The sale proceeds of Po Tak Mansion was credited into H’s Personal Savings Account, and the purchase price for Belcher Court Flat could be seen was also drawn from H’s Personal Savings Account. Thus, it could not be seen how the alleged sum of HK$500,000 was paid by W.

86.  During the trial, during cross examination, W then changed her evidence by saying that the sum of HK$500,000 was in fact paid for the renovation of Belcher Court Flat. This was, again, challenged by H’s Counsel, Ms Ng, who pointed out that HK$500,000 appeared to be a high amount for renovation for a small property such as Belcher Court Flat. The balance of the Loan of HK$2m was repaid towards end of 1997. During the trial, W said that she had paid H a total sum of HK$500,000 in 1998 by various sums. I accept what she said even though such amount might not be related to the Belcher Court Flat. Thus, out of the loan repayment, I accept that she had about HK$1.5m left after paying H about HK$500,000.

87.  At the time of the parties’ separation in 1998, the parties’ Family Assets consisted of 3 properties and cash. There were 2 properties held in the joint names of the parties, i.e. Belcher Court Flat and the Vancouver House. Although the 2^nd Flat was registered in W’s sole name, it was bought with money from the Family Fund and it was not disputed that this property should be part of the Family Assets.

88.  Apart from the 3 properties, W had alleged that the rest of the Family Assets at the time of the parties’ separation comprised of :

(i)  K Profits of about HK$4m

(ii)  Cash held in H’s personal savings account at the Hang Seng Bank (“Personal Savings Account’) of about HK$265,351.34 (A:405)

(iii)  Cash held H’s personal accounts in Canada of about HK$780,000 (A:327)

(iv)  Cash/savings held in by W of at least HK$1.5m (B:264)

89.  It has now been accepted by H that at the time of the separation, there was about HK$265,351.34 in H’s Personal Savings Account. The HS Joint Accounts were closed almost one year before the parties’ separation, and I have earlier said that I am of the view most of the K Profits were gone by when the HS Joint Accounts were closed, although when the parties filed their 2^nd Form Es, both seemed to think there was still HK$4m.

90.  Regarding the sum of about HK$780,000, in Canadian accounts, this was in fact mentioned in H’s 2^nd Form E when he stated that he had HK$780,000 in his sole name account with HSBC and Royal Bank in Canada (B:327). During the trial, he clarified this and said he made a mistake. H said those accounts were in fact joint accounts. The HSBC bank card produced by him bore only his name, but H explained that it was a joint account to which he and W each had a bank card in their respective names. The other so called personal account with Royal Bank of Canada was a visa credit card account number. According to H, when he referred to a sum of HK$780,000 in the said Form E, he was in fact referring to the balance in the parties joint accounts with the HSBC in Canada and the Royal Bank of Canada. It was not denied that the parties held joint accounts at the HSBC in Canada and the Royal Bank of Canada. I accept H’s evidence and explanation in this respect and find that there was no sufficient evidence that at the time of separation, H still had HK$780,000 in accounts held in his sole name in Canada.

91.  There was, however, no sufficient evidence that there was still HK$780,000 in the parties’ joint accounts in Canada. In view of the Shortfall, I would not have thought there would be much left in such joint accounts by the time of the separation.

92.  W’s case was that there was still a sum of HK$4m arising out of the K Profits at the time of separation, and this was taken by H. It seems that during cross-examination H agreed except that he said that it was taken away by W or W had possession of all or most of the cash in the Family Assets at the time of the separation.

93.  As I have said earlier, the main account in the HS Joint Accounts was closed on 6 June 1997 and the related time deposit account was closed on 15 July 1997, and this was almost a year before the separation. The parties were unable to obtain from the Immigration Department travel records going back to June and July 1997. It is, however, not disputed that H moved back to Hong Kong in early 1997. H denied that he was the one who went to close the HS Joint Accounts and withdrew all the balances therein. H claimed that he left the matter to W. At the time, H had moved back to Hong Kong while W had not. In this respect, I prefer W’s evidence, and that it seems more likely than not that it was H who arranged for the closing of the HS Joint Accounts. However, I have earlier said that by the time of the closing of the accounts, there were no longer any substantial sums left in the HS Joint Accounts. If one looks at the relevant statement of H’s Personal Savings Account, on 5 June 1997 there was a time deposit of about HK$171,087 deposited into the said account, and on 6 June 1997, an amount of HK$160,000 was placed on time deposit. This was the day before the closing of the main account of HS Joint Accounts, and could possibly be the final time deposit from the HS Joint Accounts which was withdrawn by H.

94.  Apart from the Loan repayment, and the HK$780,000 mentioned above, and as seen from Ms Ng’s Closing Submissions (para 64), H did not allege that there were any other monies in W’s personal accounts which should form part of the Family Assets at the time of the separation .

95.  To summarise, with the HS Joint Accounts closed almost a year before the separation, apart from the 3 properties, I find that the Family Assets at the time of the separation comprised only the following:

(i)	Balance in H's Personal Account	$265,351
(ii)	Loan repayment from Mr. L remaining in W's possession	$1,500,000

Family Assets at the time of the Agreement

96.  As mentioned earlier in this Judgment, H had signed two power of attorneys giving W the authority to deal with the Belcher Court Flat (under the 1^st PA) and the Vancouver House (under the 2^nd PA), including the power to sell.

97.  There was no dispute that the 2^nd PA was signed by H in relation to the Vancouver House sometime in late 1998/early 1999, even though the parties no longer could produce a copy of the same. The Vancouver House was sold sometime in April 1999.

98.  At the time of the signing of the Agreement in early 2000, only the Vancouver house had been sold. The other two properties had not yet been sold. W’s 2^nd Flat was subsequently sold in July 2000, and the parties joint matrimonial home Belcher Court Flat was only sold by W in December 2004 using H’s 1^st PA. The parties have now agreed that at the time of the Agreement the value of the 3 properties or sale proceeds should be HK$3,105,660.

99.  In October 1998, W made her first investment of HK$100,000 in her new carpark business, but she claimed that the sum of HK$100,000 came from her own savings. Thus, it would appear that at the time of the Agreement, the parties’ Family Assets were :

Belcher Court Flat, 2nd Flat, and the net sale proceeds of the Vancouver House, agreed value	HK$3,105,660
Balance in H's Personal Accounts :
H's Personal Savings Account at 31 December 1999 (B:418)	HK$12,638.39
The balance of the loan still in W's possession	HK$1,500,000

b. What weight should be given to the Agreement

Terms of the Agreement

100.  H filed his 1^st Form E in February 2007. In this Form E, H did not mention the Agreement at all. It was W who referred to and attached a copy of the Agreement in her 1^st Form E filed about a week later.

101.  The Agreement is a simple one and is set out in full hereunder:

“羅XX與龔XX於兩年前經雙方同意協議分居，自二零零零年二月三日起羅XX女士與龔XX先生在金錢上各不相涉，羅XX女士所擁有之任何物業資產及現金全屬羅XX女士私人及其子女擁有，日後龔XX先生不會向羅XX女士索取分毫，現雙方立此為據。

	簽署：
	龔XX  E4XXXXX(A)
	羅XX  E6XXXXX(9)
	二零零零年二月三日”

Circumstances leading to and surrounding the signing of the Agreement

102.  W first mentioned in paragraph 1.14 of her 1^st Form E that she had paid H a sum of HK$500,000 in 1998 as consideration for H’s 50% interest in the parties’ matrimonial home, and that they agreed thereafter not to make any claims for maintenance against each other. Therefore, she and H parties signed an agreement on 3 February 2000. A copy of the Agreement was first produced in her said Form E. Later, during the trial, she said the payment of HK$500,000 was in December 1999 instead of 1998.

103.  In paragraph 5.3 of the same Form E, W said in 1998 the parties agreed to separate and that she paid H HK$500,000, for which H agreed to forego his interest in the matrimonial home and signed a power of attorney authorizing her to sell the matrimonial home in future, and in 2000, the parties signed the Agreement. W further said that they sold the property in Canada in 1998, and that according to the Agreement H consented to give up his interest in that property and agreed that the sale proceeds should be given to W for supporting and providing for the children. Later, during the trial, under cross examination, W, however, said the HK$500,000 referred to in paragraph 5.3 was paid to H in early 1998 in relation to the purchase of Belcher Court Flat .

104.  In W’s Chronology, it was stated that W had paid H HK$200,000 – HK$300,000 late 1999 - February 2000. Later during the trial, she said this was in early 1998 before separation. Under cross examination, as mentioned earlier, W, however, said she paid H various sums during the year 1998, totalling about HK$500,000 during that year and I have accepted her evidence in this regard.

105.  In her affirmation, W had stated that in late 1999 and early 2000, H started to disturb her, requesting for money, and he was asking her for HK$1m, but W said she refused as the children had not yet completed their education. She then went to Canada. After she returned, she found out that H kept on looking for her. She then discussed the matter with her younger brother, her then sister-in-law, Madam Lai, and a friend. Madam Lai then advised her that if she decided to give H some money, she must ask him to sign an agreement. W said she and H went to a restaurant to discuss and H told her that he needed money to open a fruit stall in Ma On Shan. H again asked for HK$1m, and W offered him HK$500,000 payable in 2 instalments and requested him to sign an agreement. H said he would only sign an agreement after the whole sum was paid.

106.  In paragraph 13 of her affirmation, W said she recalled that she had paid H HK$360,000 in December 1999 and another sum of HK$140,000 on 1 February 2000, and that after she paid the second instalment, she called H and asked him to sign the Agreement, which he did on 3 February 2000 in a restaurant.

107.  On the other hand, H set out in his affirmation a different set of circumstances which led to his signing the Agreement. According to H, after separation but before W’s return to Hong Kong, W had transferred most of the Family Assets to accounts under her sole name without his consent. When W came back to Hong Kong in about late 1999, most of the family assets were kept by W in her name, and that he did not have sufficient money to use. H said he then contacted her by phone asking for a sum of HK$500,000, and a meeting was arranged in March 2000. W then drove to his then residence and they met inside her car, and that the first thing W did was that she took out a document which was already prepared by her and dated 3 February 2000 and threatened him that if he refused to sign, she would not give him any money. The parties then started to have argument, and H alleged that as he was provoked, he then signed the document, and in any event, his understanding of the contents of the document was that it did not include the Family Assets generated before the separation.

108.  According to H, after signing the Agreement, W told him that she had already deposited a sum of HK$220,000 into his then savings account with Hang Seng Bank, and that W told him that as he had already taken about HK$280,000 out of the family assets on previous occasions, she considered that she had given him the full HK$500,000. H said as he did not want to talk with W any more, he left the car.

109.  Whether the Agreement was actually signed in a restaurant on 3 February 2000 or in a car sometime in March 2000 was, in my view, not really that important. I accept that as the Agreement was signed over 9 years ago, the parties’ recollection of the circumstances could have faded somewhat.

110.  The Agreement was prepared by Madam Lai who had filed an affirmation in support of W’s case, and further attended trial to give oral evidence. Madam Lai claimed she graduated from university and is a teacher at a primary school. In her affirmation, she said according to her recollection, one day in about 2000, W told her that H had been harassing her and approaching her for money, and W told her that after giving him the last hundred odd thousand dollars, H promised not to ask her for money. Madam Lai said she advised W to have an agreement signed as evidence. W said as her education level was not high, she requested Madam Lai to draft the agreement. Madam Lai stated that she prepared the agreement to reflect that after signing the agreement, H would not make any monetary claims from W and that all W’s properties and cash would belong to W. She produced a copy of the Agreement as the document drafted by her.

111.  During the trial, Madam Lai confirmed that the terms of the Agreement were drafted by her under instructions of W, and W then followed her draft and wrote out the Agreement. She confirmed that W had instructed her to draft that after she paid H the money, H would not claim against any assets under her name, and that all would belong to W. Under cross-examination, Madam Lai agreed that the instruction from W concerned only those assets under W’s name and did not include properties held in joint names. Madam Lai also confirmed that she did not know as a fact whether W had paid H HK$500,000, and knew only what was told by W.

Parties’ financial position at the time of signing of the Agreement

112.  Although at the time of the parties’ separation, H still had about HK$260,000 in H’s Personal Savings Account. By the time of the Agreement, as seen earlier, he only had about HK$12,000 left. H had said that after the parties’ separation, he invested about HK$100,000 in one more business, namely selling eggs. This again turned out to be unsuccessful, and H said that by end of 1999, he had used up all his money. The HS Joint Accounts had been closed for almost 2 years by the time of the Agreement, and although W’s case was that H still had HK$4m, I had earlier found that there would not be much left in these accounts at the time of their closing, and by the time of the Agreement, I believe all would be gone. W herself had said that H was frequently requesting her for money towards end of 1999, and she herself had said in W’s Chronology that in early 1998, all H’s savings had been taken on gambling. It is thus clear, and I accept that H was indeed short of cash at the time of the Agreement.

113.  According to W, after she returned from Canada later in 1998, she first invested the sum of HK$100,000 in 2 carparks, with her brother and business was good. There were 3 companies incorporated, respectively on 6 August 1999 (W:30%), 8 November 1999 (W:55%), and 28 January 2000 (W:60%) (B:605).The Vancouver House was sold in 1999 and all net sale proceeds were kept by W. At the time of the Agreement, W still had the balance from the Loan repayment. I note that on 28 February 2000, about 3 weeks after the date of the Agreement, there was an agreement signed by the company in which W had 55% to purchase 16 car parking spaces for about HK$3.456m, and then a month later on 25 March 2000, there was another agreement signed by the company of which W had 60% to purchase another lot of car parks for HK$6.2 m. Then about 18 months later, in August/September 2001, the company of which W was a 30% shareholder purchased another 19 car parking spaces for HK$4.3m. It is clear that at the time of the Agreement W was in possession of a great deal more cash than H.

Payment of HK$500,000

114.  W’s evidence was that her last payment to H was HK$500,000 and upon payment of this sum, the Agreement was then signed. Her evidence in relation to her alleged payment of HK$500,000 to H was, again, very confusing. What one could gather from what W had said earlier in paragraph 1.14 of her 1^st Form E was that HK$500,000 was the consideration for H’s interest in the Belcher Court Flat, and this led to the signing of the Agreement, but later in the trial she said the sum of HK$500,000 was paid in 1999 and not in 1998.

115.  Despite what she said in her 1^st Form E, later in her affirmation she said that H approached her in late 1999 to request for HK$1m to open a fruit stall, and she only offered him HK$500,000 to be paid by 2 instalments.

116.  H’s case was that he was short of funds in late 1999 and he telephoned W to ask for HK$500,000 for his own use, and she agreed. Thus, it is clear that the amount both settled on was a sum of HK$500,000. The dispute was whether the actual amount was eventually paid by W.

117.  H had produced a copy of his old passbook of H’s Personal Savings Account. Between 31 December 1999 and 25 March 2000, unfortunately, H did not update his passbook.

118.  From those available statements produced by H, it could only be seen that on 25 March 2000, there were “Net Back Items” of a total HK$220,257.66 deposited into H’s Personal Savings Account. H is now no longer able to obtain details of the transactions between 31 December 1999 and 25 March 2000, since these transactions fell outside the 7 year period which banks normally keep transaction records for.

119.  One of W’s complaints in this case was the long delay in H issuing his application, which resulted in prejudice to her case. I will deal with this later in the Judgment. I note, however, H’s petition was issued on 29 November 2006, which contained his prayer for ancillary relief, and on 1 December 2006, H’s petition and Notice of 1^st Appointment were served on W. Had the parties immediately taken steps to obtain relevant statements and transaction records from the banks concerned shortly after the issue of the petition, it might still be possible to obtain statements and records as far back as December 1999 or early 2000, i.e. the time of the Agreement and these might help to shed light on some of the disputed matters. During the proceedings, H did manage to obtain further information from the banks, and even as late as during the adjournment of the first part of the trial in December last year until the resumption in May this year, H had again managed to obtain further information from the banks, as far back as 2000.

120.  The missing transactions were between January and March 2000. W’s evidence was that she had paid the sum of HK$500,000 to H by 2 instalments, the first one being a sum of HK$360,000 in December 1999. H in fact said that he received only HK$220,000 after signing the Agreement. Anyway, no credit of HK$360,000 could be identified in H’s Personal Savings Account in December 1999, As to the 2^nd instalment of HK$140,000, as W managed to produce a copy of the credit advice, there was no doubt that she did credit this amount into H’s Personal Savings Account on 1 February 2000.

121.  Although one could not see a sum of HK$360,000 being paid by W to H in December 1999, I have said that the settled sum was HK$500,000. As set out in subsequent paragraphs, H did not pursue W for any unpaid portion of the settled sum of HK$500,000. Whether W made an actual payment of the HK $360,000, or whether as H had alleged, she set off some sums he had taken from the Family Assets or some interests he had collected from Mr. L, I find that H had accepted that the payment of HK$500,000 had been effected, since he did not take any steps at the time to seek further payment from W.

Conduct after the signing of the Agreement

122.  The Agreement did not require any implementation in the sense that there were no provisions for the parties to take any further action thereunder. After signing the Agreement, the parties apparently had little contact with each other, save when according to W, H had sometimes parked his car at her carparks.

123.  Almost immediately after signing the Agreement, on 30 March 2000, H paid HK$180,000 for a red Benz sports car by acashier order from H’s Personal Savings Account. W had thus said that this was an indication that H had some undisclosed funds. H said that he only bought this car with the purpose of selling it at a profit later, as the normal price for the car would be over HK$210,000 to HK$220,000, and he thought he had a good bargain. Later, he sold it to W’s younger brother who paid him HK$150,000 and gave H another car worth about HK$30,000 in exchange for the Benz sports car. The sum of HK$150,000 was probably the sum credited back into H’s Personal Savings Account on 2 August 2000. H said in the end he did not make any profit. As H was in the second hand car trading business before the marriage, what he said was not improbable. Anyway, I am of the view that the purchase of the Benz sports car was not sufficient evidence that he had some other undisclosed funds.

124.  Although during the trial, H said that in fact in about June 2000 he started to work as a taxi driver but this was only a part time job and it appears that he did not work full time for a long time. He was frequently going to Macau, to gamble, and perhaps to visit the woman W alleged he was cohabiting with. I accept that by comparison, W worked hard and her car park businesses flourished.

125.  During the period after the Agreement and until the issue of his petition, H did not approach W to request for more money. H himself had said in his affirmation that after the signing of the Agreement, he was told that W kept spreading rumors about him among friends and relatives, and further, he did not want to have any argument with her any more, and therefore he hesitated to contact her even when he did not have enough money to spend. However, H claimed that W continued to spread rumours about him, and he had no alternative but to apply for legal aid to start the divorce proceedings. During the trial, H had also said that prior to starting the divorce proceedings, he had in fact contacted W to request for a reconciliation, but that was turned down.

126.  Anyway, it was not disputed that after the Agreement H did not pay any maintenance for the children who were still attending universities at the time. H accepted that W was wholly responsible for maintaining the children, but he said W was maintaining the children out of the Family Assets. H now has agreed that the children’s maintenance expenses are to be deducted from the Family Assets in considering any division thereof.

Discussion

127.  It was pointed out again recently by Elizabeth King J in S v S (Ancillary Relief) [2009]1 FLR 258 that in any consideration of the authorities relating to ‘agreements’ the starting point must always be Edgar v Edgar [1980] 1 WLR 1410, (1981) 2 FLR 19, [1980]3 All ER 887 and she quoted Omrod LJ’s classic exposition of the law at 1417, 25 and 893 respectively :

“Under s. 25(1), it is the duty of the court to have regard to all the circumstances of the case and, in particular, to the matters detailed in paragraphs (q) to (g)…….

To decide what weight should be given in order to reach a just result to A prior agreement not to claim a lump sum, regard must be had to the the conduct of both parties, leading up to the prior agreement, and to their subsequent conduct, in consequence of it.  It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel, all the circumstances as they affect each of two human beings must be considered in the complex relationships of the marriage. So circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of the making of the agreement, are all relevant to the question of justice between the parties.  Important too, is the general proposition that, formal agreements properly and fairly arrived at with competent legal advice, should be given effect to unless good and substantial grounds were shown for concluding that injustice would be done by holding the parties to the agreement.”

128.  In Macleod v Macleod [2008] UKPC 63, [2009] 1 FLR, Baroness Hale had again said:

“There can be no doubt that in this case, as in so many, There is a disparity of bargaining power.  The crucial question, however, for present purposes is not whether the husband had a superior bargaining power, but whether he exploited it in a way which was unfair to the wife, so as to induce her to act to her disadvantage.”

129.  In the case of S v S, Eleanor King J was in fact dealing with case management directions in ancillary relief proceedings where the issues was whether there had been a concluded agreement. She went through the authorities and elicited a list of propositions (at paragraph 23). She said that it was not necessary for every detail to have been resolved prior to the court taking the view that there was an agreement to which a party should be held and reminded herself of the two stages of an agreement, namely:

· The first stage of negotiation, which should then be set out in a simple heads of agreement, is ‘what is the applicant to receive?’

· Points of detail, which can then be determined by the court at an abbreviated hearing.

130.  The parties were not legally represented at the time of signing of the Agreement, and the Agreement was not drawn up by lawyers. The parties had instructed solicitors for their various buying and selling of properties, and the 1^st PA was prepared by a solicitor, and signed and witnessed by a solicitor. Yet, the Agreement was not. In my view, both had ample opportunity to take independent legal advice, and neither did. Although W had said H had asked for HK$1m, and she offered HK$500,000, H said he only asked for HK$500,000. Anyway, there was no sufficient evidence that the Agreement was a properly negotiated document. In short, the Agreement clearly fell far short of a formal agreement, and is quite different from the kind of agreements as in the cases such as Edgar v Edgar, S v S, or Macleod v MacLeod.

131.  There was further no full disclosure of parties’ means at the time, in particular, there was no disclosure at the time as to the balance in H’s personal accounts or W’s personal accounts. There was no evidence that the parties even knew that they were entitled to such financial disclosure before the signing of the Agreement.

132.  The Agreement stated, inter alia, “From 3 February 2000 the parties will not interfere each other in relation to money. All properties, assets and cash owned by W shall belong to W and her children absolutely, and in future, H shall not in the future make any claims against W for a penny.” (this translation was according to the court certified English translation which was made available to the earlier FDR Judge) or words to that effect.

133.  One could see from the summary of Family Assets that as at the date of 3 February 2000, i.e. date of the Agreement, there were still Family Assets, which were jointly owned. There was no reference at all in the Agreement regarding the payment of HK$500,000, whether paid by instalments or not. By the time of the Agreement, the two Powers of Attorney had already been signed by H. There was no reference in the Agreement to these Powers of Attorney.

134.  At the time of the Agreement, the Vancouver House had already been sold by W using the 2^nd PA, but the other 2 properties, one joint, one in W’s sole name, had not.

135.  The two Powers of Attorney were signed after the parties’ separation but before the Agreement. H said he signed the 1^st PA to enable W to “manage” or deal with all matters regarding Belcher Court, and later, similarly he signed the 2^nd PA for W to “manage” the Canadian properties. H agreed with W’s solicitor during cross-examination that as he and W were living apart, he signed the PAs so that W could sell the properties to maintain the children. He further had said that he signed these PAs voluntarily so that his family could feel secured while living in Canada “等佢地安心在加拿大生活”, but he maintained that he did not have the intention to give all the Family Assets to W.

136.  In this respect, I note that this was also what was said in by S in his affirmation (A:576), namely his father told him that “he would like to walk away from the family and left everything to be handled by his mother” (my underlining).

137.  It may well be that W was under the impression that by having signed the two Powers of Attorney, H had already given her his beneficial interest in the 2 joint properties, and that as at 3 February 2000, such properties/sale proceeds were all assets “owned ” by her. This was a misunderstanding of the law on her part. I accept that W was not that highly educated, but the 1^st PA was prepared by a solicitor who had interpreted the terms of the 1^st PA to the parties at the time of the signing. Further, one would have thought that as it was her own evidence that H kept requesting money from her after giving her the two Powers of Attorney, this would at least have alerted her to seek legal advice.

138.  Stock JA, said in L and C [2007] 3 HKLRD 819, when considering the effect of the agreements in that case:

““Precisely because agreements for the division of assets tend to be concluded against an emotionally charged backdrop, steeped in present and future uncertainty, the courts will take particular care to examine an assertion that an agreement should be accorded no or little weight because of this or that unconscionable aspect to the circumstances in which it was concluded.  So too, because of the way in which the statutory duty is framed, it is incumbent on a court, even though there exist no circumstances surrounding the making of the agreement that should vitiate it, nonetheless to examine the present condition of the parties to determine whether justice demands a different dispensation.  The subject matter is peculiarly fact-sensitive.  Many questions will arise: the availability of legal advice at the time of the negotiations and conclusion of the agreement; whether those negotiations and the conclusions reached were attended by undue pressure, including self-induced pressure; whether there is some factor in the relationship between the parties, such as the exploitation of a dominant position, or the use of children as a weapon wielded against one of the parties; whether judgment has been impaired by emotion or fear or misapprehension of the factual or legal position; whether the parties have acted upon the agreement reached; and whether there has arisen since the making of the agreement a fresh unforeseen event by reason of which it may be unconscionable to hold the parties to the strict letter of the agreement.  If one or more such circumstances are shown, then the court in the exercise of its supervisory jurisdiction might well interfere with the dispositions effected under the agreement.”

139.  There was disparity in parties’ bargaining power, and H said there was undue pressure for him to sign. I do not, however, find that there was sufficient evidence to say that W had exploited her dominant position, and I find that whatever undue pressure H alleged was self-induced pressure. I therefore find that he did sign the Agreement voluntarily, but I accept that there was ambiguity in the Agreement and there was there was clearly inadequate knowledge on the part of the parties, lack of legal advice and lack of proper financial disclosure.

140.  ML graduated from university in 2001, and S graduated in 2002. Thus, at the time of the separation, ML still had about 3 years of education, and S about 4 years. It appears that the Family Assets at the time of the separation should be more than sufficient to cover the children’s maintenance and education expenses for the remaining of their university education. I accept H’s evidence that at the time of their separation H signed the 2 Powers of Attorney only for W to deal with and manage the 2 joint properties, giving her the power to sell, and to maintain the children out of any net sale proceeds thereof and/or other Family Assets and he had not intended any balance would all be kept by W.

141.  Having considered all the above circumstances, I am prepared to give H the benefit of the doubt and I am of the view that H should not now be barred from seeking a share of the Family Assets.

142.  Having said the above, I am however, of the view that in considering the division, weight should be given to the fact that H did sign the Agreement and I will consider this later in the Judgment.

c. What should be a fair distribution of the Family Assets

S.7 Factors

Income, earning capacity, property and other financial resources

143.  As I have mentioned earlier, after separation and her return from Canada in 1998, W invested in a car park business with her brother, which in turn became very successful. According to her, at the height of her business, her carpark business managed 17 carparks. She now claims to have retired since 31 March 2008, receives dividends from the 3 companies of about HK $30,500 per month (para 3.4, B:613). She has 2 other properties held in her personal name jointly with S. She is residing in one of the properties with S, but S got married early this year, and W said she might have to move out to the other joint property, which is now being rented out. The net rental of the other joint property is about HK$11,000 per month. In her 1^st From E, W listed her total net assets to be about HK$11m, but in her 3^rd Form E, such total net assets had dropped to about HK$8.6m.

144.  Compared to W, H has clearly fallen on bad times. H’s Personal Savings Account was closed on 22 April 2002. When he filed his 1^st Form E, he disclosed only one savings account with the Bank of China with a balance of about HK$14,000. H had no other assets. According to his 1^st Form E, he was working as a taxi driver earning about HK$15,400 per month, although during the trial he said in 2007, he stopped working for a period of 2 to 3 months after a traffic accident on 13 May 2007. He eventually received a total of HK$90,059 compensation, the balance of which was received by him only on 2 April 2009, about 6 weeks before the trial resumed (P-6).

Financial needs, obligations and responsibilities

145.  At the time of his 1^st Form E, H was living in a rented unit for which he paid HK$1,500 per month, inclusive of utilities). His total monthly expenses were about HK$12,000 per month.

146.  In her 3^rd Form E, W stated that her monthly expenses were about HK$33,000. W has asked that an amount of HK$200,000 should be set aside from the Family Assets, if there were to be a division for ML to undergo the cochlear operation.

Standard of living enjoyed by the family before the breakdown of the marriage

147.  The parties had enjoyed a fairly comfortable level of living at the time of their separation. They had a house in Canada, and also bought a flat in Hong Kong.

Age of each party to the marriage and the duration of the marriage

148.  H is now aged 56 and W is now 53. Their marital relationship, up to the time of their separation, was 20 years, and was a long marriage.

Physical or mental disability of either party

149.  There is no evidence that H is suffering from any physical or mental disability. So far as W is concerned, one of her fingers was amputated in 1996, and apparently her right ankle has 5 screws inside. She did suffer from depression but that was over 10 years ago.

Contributions to the welfare of the family

150.  W had also said while she was working very hard running KW Car Park during the marriage, H was often not there, and spending time on his Buddhist/religious activities, or fishing. H, however, said that by that time, the business was running well, and he could therefore relax.

151.  W said H had contributed nothing after separation and that W had to take up the responsibility of the father and to raise the children single-handedly. By the time of the separation, the children were at university, and H has agreed that their maintenance expenses are to be deducted from the Family Assets before any division.

152.  Although H started to gamble after the emigration, H had said he would go to casinos with W. After emigration until when H returned to Hong Kong, it appears that both parties were simply enjoying retirement and not working. Later, towards end of 1994, when H decided to return to Hong Kong until the time of the separation in 1998, H did try to work and invested in 2 businesses, while W continued to remain a housewife. I accept that since about 1995, H did gamble and womanize, and the marriage started to break down and that it was H who eventually moved out of the matrimonial home.

153.  Mr. Cheng has submitted that W had more contributions as the parties became involved in car parking business through the connection of W and her mother. The parties did, however, work together in their businesses and had built up the Family Assets jointly in a relationship which appeared to be harmonious for at least 17 until 1995. I, however, accept that after the parties’ separation, W continued to look after the children singled handedly, in addition to working. Although by then, the children are grown up and attending universities, they still need emotional or other support and care, other than financial support. I am of the view that W should be given some credit for her continued contribution in this respect.

Value of any benefit which by reason of the dissolution of the marriage either party will lose the chance of acquiring

154.  There was no evidence of any such benefit.

Conduct

155.  It was not denied by H that he had transmitted a sexual disease to W, and that W suffered depression for a while, and it had not been put forward by Mr. Cheng that this constituted any “gross and obvious misconduct”. The particular conduct Mr. Cheng asked this Court to take into consideration in his Closing Submission was H’s gambling, the Agreement, and his lack of full and frank disclosure.

156.  Even though the parties became involved in the carpark business through the connection of W and her mother, the parties did work together until the time of their emigration. I accept, however, that after emigration, H started to gamble. Although H’s travel records showed that he did go to Macau frequently, and the bank statements of H’s Personal Savings Account showed that he was frequently withdrawing sums in Macau, there was no evidence that he ever borrowed from loan sharks. There was no evidence of his personal accounts being substantially overdrawn, or that he had incurred any other loans. There were also various deposits into H’s Personal Savings Account, which H said were unused amounts or winnings after his gambling. According to a schedule prepared by Mr. Cheng, H’s total Macau withdrawals were HK$657,302 over a period of about 3 years from October 1997 to September 2000 (R-2), but H then produced a schedule, and claimed that the cash deposits he made during the same period after trips to Macau were HK$954,600.

157.  H also did try to work and invested in 3 businesses, but unfortunately they failed.

158.  As said above, I am not satisfied that there was sufficient evidence that H had frittered away substantial amounts by his gambling, and there was certainly no sufficient evidence that he lost about HK$4-5m over gambling as alleged by W.

159.  Mr. Cheng has also submitted that H had failed to make full and frank disclosure of his financial position. Mr. Cheng has prepared a schedule of deposits into H’s Personal Savings Account and at one stage claimed that He had deposited a total of HK$14.5m within the period from 20 August 1993 to 23 September 2000 (R-3). I find such schedule somewhat misleading as it did not take into account withdrawals, such as substantial amounts transferred from the time deposits in HS Joint Accounts but subsequently transferred back to the HS Joint Accounts, or sale proceeds from Po Tak Mansion, which were subsequently transferred to purchase Belcher Court Flat. Unlike W who disclosed having 9 bank accounts, it appears that H had kept his financial affairs simple by not having too many accounts. He did have accounts at HSBC, but later on he seemed to be using only one personal account, namely H’s Personal Savings Account, and at present only one account at Bank of China. I am not satisfied that there was sufficient evidence to show that H had other undisclosed bank accounts or that he failed to make full and frank disclosure of his finances. As I have said earlier in this Judgment, I believe, like W, H’s memory has faded over the years.

160.  Mr. Cheng has also submitted that H’s conduct of signing the Agreement and not taking any action until over 8 years later has prejudiced W, and this should be taken into account by the court. I will consider this and the overall effect of delay hereunder.

Delay

161.  In Rossi v Rossi [2007]1 FLR790, Mostyn QC, then sitting as Deputy High Court Judge, said :

“There is a risk of injustice caused by delay.  The longer the time that passes, the more likely it is that documents will disappear and memories cloud, with the result that there is a greatly enhanced risk of the court rendering imperfect justice.  While no rigid rule can be expressed for the infinite variety of facts that arise in ancillary relief cases, it would be very difficult for a party to be allowed successfully to prosecute a claim initiated more than 6 years after the date of the petition for divorce unless there was a very good reason for the delay (paras[29].[32])”

162.  In Rossi v Rossi, the husband initiated claims for ancillary relief against his former wife about 15 years after the divorce. Further, at the time when the wife divorced the husband, he did not defend and further signified he would not claim ancillary relief.

163.  In S v S [2006] EWHC 2339 (Fam), the couple had been apart for 7 years before the husband presented a divorce petition and the ancillary relief hearing did not take place until more than 10 years after the separation. Singer J said “As the years had passed since the separation, it had become less and less fair that the wife should be entitled to ask for a share in the potential of the husband’s company. ….” In that case, the main issue was how should assets acquired or created after separation be treated in a case where there had been a long delay.

164.  Mr. Cheng has referred this Court to the article “Delayed Claims and After-acquired Assets” April [2007] Fam Law 316. In the “Conclusion” on page 319, the proper approach was set out as follows:

· The court should assess the assets at the date of trial

· It is now a ‘primary function’of the court to distinguish matrimonial and non-matrimonial property

· Assets acquired or created post-separation by the industry of one party rather than passive economic growth may be non-matrimonial property

· Non-matrimonial property is not to be quarantined. The distinction will carry little weight were the claimant’s needs cannot be met without recourse to the non-matrimonial property

· In deciding whether an after-acquired non-matrimonial assets is to be shared, the court will consider among other thins, whether the applicant has proceeded diligently

165.  In the present case, H’s claims are confined to a share of the matrimonial property only, i.e. the Family Assets at the time of separation. Thus, this Court is not concerned over the treatment or valuation of non-matrimonial property.

166.  Although H said he had obtained some of the bank statements from the bank, some of the statements he produced had clearly been retained by him all these years, such as the passbooks of H’s Personal Savings Account. Mr. Cheng had submitted that as W did not expect H to make a claim after all these years, she had not kept any of her statements for the early years.

167.  I have earlier pointed out that H’s petition was issued at end of November 2006. In the prayer of his petition, he had set out his claims for ancillary relief. The parties’ 1^st Form Es were filed in February 2007. It was W who raised and produced the Agreement. Had W applied then for her statements from the banks for the early years, she could perhaps still be able to obtain the relevant statements, at least for those statements towards end of 1999 or early 2000, since even after December last year, H managed to obtain further information from the banks going back to 2000.

168.  Mr. Cheng said W was disadvantaged and prejudiced. I accept that even if she were able to obtain information from the banks going back to 2000, she would probably not be able to obtain those bank statements for her personal accounts, or those joint accounts in Hong Kong or in Canada as far back as the time of emigration up to the time of the parties’ separation. I have accepted what she said, that most of the Family Fund was used up, and there was little left in the joint accounts in Canada by the time of the separation. I, however, agree that had W kept or managed to obtain any of the statements of her personal bank accounts dating back to the period from the time of their emigration or towards end of 1993 to their separation in1998, this might have helped in ascertaining the amounts she alleged she had in her personal accounts.

169.  The bank statements of the HS Joint Account were obviously extremely relevant, but H had produced whatever he had retained and whatever he could obtain from the bank.

170.  Mr. Cheng has submitted that H’s delayed claim had caused W not to take any “safeguard “in order to protect her interest. Having considered all the circumstances, I am of the view that regard should be given to H’s delayed claim.

Valuation of the 3 properties

171.  There was a dispute as to what valuations should be adopted for the 3 properties for distribution. Ms Ng relied on the then valuations, but she, however, agreed another set of valuations as at the time of the Agreement another set of valuations, which represented the approximate net sale proceeds at the respective sale date of the 3 properties.

172.  It is clear from Rossi v Rossi and as set out in the Conclusion of the Article referred above the court should assess the assets at the time of the trial.

173.  This also appeared to be the approach adopted by the Court of Appeal in WSW and TKK, unreported Judgment in CACV 388/2007 (paragraphs 60-62).

174.  In most ancillary relief hearings, generally speaking, the date of trial would be some time after the date of separation. I therefore do not agree that the Family Assets available for distribution should be their value at the date of separation. Had the 3 properties not been sold by the time of the trial, the Court would need to consider their present value. However, by the time of the trial, all 3 properties had already been sold. After the separation and until the sale of the 2^nd Flat and the Belcher Court Flat, H did not apply for a divorce. I am of the view that the value of the 3 properties should be their net sale value, which was the agreed amount of HK $3,105,660.

175.  By the time of the Agreement, H only had about HK$12,640 cash left, whereas W had at least HK$1.5m. I would use these figures for considering the division.

Division

176.  There was no dispute between Ms Ng and Mr. Cheng as to those principles set out in the case of DD v LKW [2008] 2 HKLRD 523, namely that the distribution of the assets by reference to the three principles of need (generously interpreted), compensation and sharing. H did not, however, mount a case based on compensation or needs, and is only seeking an equal share of the Family Assets.

177.  H has now agreed to the maintenance and education expenses for the children from May 1998 to May 2007 to be HK$2,559,510, and that this amount should be deducted from the Family Assets.

178.  W has said that her own expenses after separation should also be deducted. I do not think that this is right. They should each be responsible for their personal expenses out of their respective share of the assets. W has sought a sum of HK$200,000 to be set aside for ML’s cochlear operation. I have said that I did not find sufficient evidence to support W’s allegation that H had assaulted ML to such an extent to have caused ML’s present deafness. There was no sufficient evidence that this operation would indeed improve ML’s condition and it is not certain as to when ML intends to undergo. ML is now 30. She is working, although her ear problems have affected her earning capacity, but she should also be entitled to medical care in Canada, being a Canadian citizen. At the moment, W is in a much better financial position than H. Having considered the above, I will not set aside the sum of HK$200,000.

179.  To summarise, in my view, the value of the Family Assets available for distribution were therefore:

(i)	The Vancouver House, W's 2nd Flat and Belcher Court	HK$3,105,660
(ii)	Balance in H's Personal Savings Account	$12,640
(iii)	Loan repayment from Mr. L to W, and accepted by W	HK$1,500,000
	Total	HK$4,618,300
	Less children's maintenance	HK$2,559,510
	Net total	HK$2,058,790

180.  Although the parties’ marital relationship was a long one, I have said earlier that I will give weight to the fact that H did sign the Agreement, that W had continued to look after and care for the children single-handedly after separation, and I will regard to H’s delayed claim. In my view, all this justifies a slight departure from equality, and having regard to all the circumstances, I will award H about 45 % of the Family Assets.

181.  I have accepted that the payment of the sum of HK$500,000 was effected from W to H at the time of the Agreement. This and the small balance in H’s Personal Savings Account will be deducted from his share.

182.  To round it off, I am of the view that a fair sum which H should be entitled to is a lump sum of HK$415,000. Upon full payment of this sum by W to H, all the parties’ claims for whatever forms of ancillary relief shall be dismissed.

E ORDER

183.  My order is thus:

(i)  The Respondent shall pay the Petitioner through the Director of Legal Aid a lump sum of HK$415,000 within 30 days of the date of this order.

(ii)  Upon full payment of the said lump sum, all the parties’ claims for whatever forms of ancillary relief shall be dismissed.

(iii) COSTS

184.  H has succeeded in being awarded a share of the Family Assets, albeit such award falls far short of his claims. On the other hand, W’s position, however, has been that H should not be entitled to a single cent, and she made no open proposals. I am therefore of the view that W should pay H’s costs of and incidental to his application, to be taxed, if not agreed, on party and party basis, with a certificate for counsel. This is an order nisi, which shall be made final and absolute, if no application is made before 21 days.