HEUN SOOK JONG v. STEPHEN HENRY MILLER

1985, No. A3993

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. Unhappily this summons involves a bitter dispute between the Plaintiff and Defendant who are Husband and Wife. The litigation between the parties has been protracted. The Wife in 1985 obtained a judgment against the Defendant's husband on a dishonoured cheque or cheques in the sum of $800,000.

2. At the end of 1985 and the beginning of 1986 there was a reconciliation between the parties. One result of this was that the Husband withdrew his appeal against the Order 14 judgment which had been entered against him. Another result was that the wife did not endeavour to proceed to enforce the said judgment.

3. Regretably the reconciliation has broken down. The Wife has attempted to enforce the said judgment.

4. The Husband made an application to Mr. Justice Liu recently for leave to extend the period of time for him to lodge the appeal against the said judgment. For reasons, of which I am respectfully in complete agreement, Mr. Justice Liu dismissed this application.

5. The husband then took out the present application which is 2 fold. He is seeking a Declaration that the said judgment has already been satisfied and an injunction restraining the wife from enforcing the judgment or commencing Bankruptcy proceedings.

6. It is the Husband's case that he has made substantial transfers of property to the Wife and that these transfers were in satisfaction of his indebtedness to his Wife.

7. The properties transferred were 2 motor cars, a Rolls Royce and a Ferrari and a 50% shareholding in a company called Jarona. It is clear from the evidence before me that the Wife did in fact sell the shares and the proceeds of sale amounted to A$250,000, A$125,000 being attributable to the 50% interest.

8. It is the Wife's case that both cars were a gift to her from the Husband and that these gifts were in no way connected with the satisfaction of the judgment debt.

9. As regards the shares she claimed that she was at all material times the beneficial owner of the shares. She contended that the Husband was only holding the shares as a trustee for her.

10. Initially the application ryas set down for half day. Needless to say this was hopelessly inadequate. In fact it took the best part of 3 days to hear it.

11. It would have taken a great deal longer had I not made several Rulings which had the effect of confining the issues to the subject matter of the application.

12. Perhaps understandably Mr. Collins for the Husband was anxious to include as much material as possible and endeavour to connect the application to the pending application for ancilliary relief in relation to the fresh Divorce proceedings which have now been commenced by the Wife.

13. Indeed, Mr. Collins endeavoured to argue the second part of the application namely the proposed injunctive relief on the basis of the principals propounded in American Cynamide v. Ethican. He contended that all the Husband had to establish was an arguable case that the judgment had in fact been satisfied and that when the Court came to adjudicate upon property matters between the parties it would then be appropriate to resolve all outstanding matters between the parties.

14. I was not prepared to accept that this was the correct approach to this application. I found myself much more in sympathy with the submissions made by Mr. Whitehead for the Wife that the issues arising our of the present application were relatively straightforward and simple and should not be connected with the overall disposition of property held by the parties.

15. Both the Husband and Wife were cross-examined on the many affidavits lying on the Court file. I regret to say that I did not find either party to be convincing or completely truthful witness. Of the two parties I was definitely more inclined to accept the testimony of the Husband than the Wife.

16. It was the Husband's evidence that the Wife had extorted all his property from him. He claimed that when there was a matrimonial dispute it had been the practice of the Wife to present him with either blank sheets of paper or handwritten documents and demand that he signed them. He had only signed the documents tendered to him to mollify his Wife and as a means of buying peace. He went on to say that he had transferred to her name everything he had owned. Also he had paid to her a substantial part of the high salary he had received when he was an Employee of Dragonaire. His salary including perks had amounted to almost $100,000 per month.

17. The Husband gave evidence that he was the beneficial owner of the shares in Jarona. He said that he had transferred his 50% interest to his Wife. He denied that he only held the shares as nominee for his Wife.

18. The main problem which arose concerning the Husband's evidence was in establishing that the transfer of the assets I have referred to was in discharge of the said judgment debt.

19. The Husband attempted to support his evidence by reference to a letter he had written to his Wife and copied to his solicitor Mr. Jolly of Deacons dated 15th October 1986. In this letter he stated that the transfers had been intended to be in discharge of the debt.

20. He agreed that he had not immediately sent this letter to his Wife.

21. After a serious altercation with his Wife, he had removed himself temporarily from the matrimonial home and had booked in at the Furama Hotel. He had sent the letter from the Hotel to his Wife at the matrimonial home.

22. The reason he gave for this was that he anticipated that his Wife would have been most unhappy to receive this letter as he did not think that she would have agreed to its contents. The reason he had sent the letter from the Hotel was that he wished to avoid being present when the letter was received by her.

23. I find this evidence to be illuminating. It indicates to me that the Husband was very well aware that the Wife had not ever accepted that the transfer of assets to her had been in discharge of the judgment debt.

24. Mr. Whitehead put it to the Husband that the idea of the debts having been satisfied by the transfers had only occurred to him as an afterthought. The Husband denied this. I regret that I did not find his denial to be convincing.

25. It is necessary for me to say more about the Jarona shares. I have no doubt whatever that the Husband's testimony is to be preferred to the Wife's.

26. During the course of cross-examination, Mr. Collins put to the Wife the contents of paragraph 12 of the Wife's affidavit dated the 9th October 1985. This reads:

"At this time my marriage to the Defendant had broken down and I told him that I intended to seek a divorce. However, we agreed to try a reconciliation. In early May, 1985 the Defendant asked me to lend him A$12,475, which he needed to pay to an Australian Company, Bellata Holdings Pty Limited, in which he owned some shares. The Defendant's request is now produced and shown to me marked "HSJ-6". I lent the Defendant the money and in return he gave me a post-dated cheque for HK$80,000. On the 4th June, 1985 I presented the cheque for payment to the Bank. The Bank refused payment and returned the cheque to me on 5th June, 1985 for the reason "Not arranged for". A copy of the cheque and the advise from the Bank are now produced and shown to me marked "HSJ-7"."

27. The Wife accepted that the shares in Bellata Holdings referred to were the same interest as the Jarona shares. She was unable to give any satisfactory explanation for the disparity between the evidence she gave in the proceedings before me concerning her alleged beneficial interest in the shares and the matters deposed to in paragraph 12.

28. I am satisfied that the Wife deliberately attempted to deceive the Court when she gave evidence that the Husband was holding the shares beneficially for her. I do not accept that was the case.

29. However I do not think that this makes any difference to the outcome of this application.

30. The critical matter I have to decide is whether the Husband has satisfied the judgment debt.

31. Notwithstanding the fact that I regard the Wife as an untruthful and untrustworthy witness, I am nonetheless convinced that when the Husband made the transfers of said assets to the Wife there was no agreement between the parties that the transfers of assets were to be treated as being in satisfaction of the said debt.

32. I regard this as being crucial to this application.

33. For the application to succeed it must be shown that the transfers were intended by both parties to be in satisfaction of the debt. The Husband's failure to establish this seems to me to be fatal to this application.

34. I regret that I have no alternative but to dismiss this application. I will hear the parties on costs.