CWG v. MH AND OTHERS

CACV 80/2013
CACV 81/2013
CACV 82/2013
CACV 83/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 80 OF 2013

CIVIL APPEAL NO. 81 OF 2013

CIVIL APPEAL NO. 82 OF 2013

CIVIL APPEAL NO. 83 OF 2013

(ON APPEAL FROM HCMP NO. 643 OF 2012)

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_______________________

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J U D G M E N T

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Hon Yuen JA:

CACV80/2013

1.1.   CACV80/2013 is an appeal by the former husband in a marriage (“the Husband”) against the judgment of DHCJ B Chu (now B Chu J) given on 26 March 2013 (“the Main Judgment”) in proceedings under Part IIA Matrimonial Proceedings and Property Ordinance Cap. 192 (“the Part IIA Application”).    

1.2.  The former wife (“the Wife”) has filed a Respondent’s Notice in this appeal.

CACV81/2013

2. The Wife has herself filed an appeal against the Main Judgment for orders more favourable to herself. 

CACV83/2013

3.1.   At the hearing of the Part IIA Application, it was the Wife’s case that the Husband owned, or had interests in assets owned by, various companies. The Husband denied this and alleged that they belonged to his mother (“the Mother”).  The Wife subsequently joined the Mother as a party.

3.2.   CACV83/2013 was an appeal lodged by the Mother against the Main Judgment.  The Wife has filed a Respondent’s Notice in this appeal as well.

3.3.  On the first day of these appeals however, we acceded to a Hadkinson v Hadkinson[1952] P 285 application by the Wife that the Mother should not be heard on this appeal, as well on appeals in which she was a respondent, on the ground that she had failed to comply fully with an order for disclosure made against her by Jeremy Poon J (now Poon JA) on 10 August 2012.  The Mother’s appeal was accordingly dismissed with costs.  Our Reasons for Judgment and Judgment on Costs was handed down on 30 June 2014.

CACV82/2013

4. The case of the Husband and the Mother was that she had made a gift of 6,000 shares out of 6,251 shares she owned in a corporation in Macau (“Macau Corp”) to an organization/foundation called “MVF”.  MVF was also made a party to, and took part in the hearing of, the Part IIA Application.  It lodged an appeal against the Main Judgment (CACV82/2013).  For reasons which will appear below, we determined that MVF had, or no longer had, a legal interest in the order of the learned judge against which it could appeal.  Accordingly this appeal was also dismissed.

Other parties

5. Counsel acting for other parties before the judge only made submissions on their costs of the Part IIA application.

Background

6. It suffices for present purposes to summarize the background to these appeals as follows.

The Husband

7.1. The Husband was born in 1959, the only child of the Mother by her cousin “EH”.  The Mother and EH were already married to other persons with whom they had children.  The Mother’s children by her husband are referred to as “the M children”. 

7.2.   The Husband’s father EH came from a wealthy family but by the time of the Part IIA trial, the Husband and EH were estranged.

The Mother

7.3.   The Husband’s mother was a successful businesswoman.  For a long time, she had worked in Macau for Macau Corp which was operated by her brother “SH”.  She is the registered shareholder of 6,251 shares in Macau Corp.  Although she purportedly transferred these shares (together with shares in ST Shipping, a related company) to a Panamanian company in 1983[1], the transfer was not approved by the Macau government for a number of years and in any event, Macau Corp has refused to register the transfer[2]. Accordingly the Mother remains the registered shareholder of these shares (although EH has alleged in proceedings against her commenced in 2011 that she has held them on trust for him). 

7.4.   In 2001, as a result of a dispute between the Mother and SH, she ceased working for Macau Corp.  In 2002, she was sued by the M children over the transfer of the Macau Corp shares as they claimed that under Portuguese law they had a right to a portion of her assets.  The Mother renounced Portuguese nationality and moved to live in Hong Kong.  By that time she was in her late 70’s.  Apparently she has not worked since then.

After the Husband’s return to Hong Kong

7.5.  The Husband went to school and college in the United States.  When he returned to Hong Kong in 1985 aged 26, he resided at Estoril Court, which was the Mother’s residence when she stayed in Hong Kong, as well as the residence of some of the M children.  One apartment (Unit D) had been acquired in 1983 and another apartment (Unit C) was acquired in 1985.  The registered owner of both apartments was WS(HK), a Hong Kong company.  The original shareholders of this company was the Mother and WM, one of the M children.  I will refer to subsequent developments in the shareholding of this company later in this Judgment[3]. 

7.6.   After the Husband’s return to Hong Kong, for a time he traded in commodities with money belonging to the Mother.  The trading ended in a substantial loss which led to litigation.  The litigation commenced in 1991 and resulted in a judgment against the Husband in the sum of more than $23m in 1994.

7.7.  Thereafter, although the judge referred to the Husband not having been engaged in “gainful employment” in the sense of holding down a job in the conventional sense, he was engaged in various activities referred to later in this Judgment.  At the time of the Part IIA trial, he was 54 years old.

7.8.   As the judge noted in paras.635-636 (unless otherwise indicated, references in this Judgment to paragraph numbers are to the Main Judgment), the Court of Final Appeal has held in KEWS v NCHC [2013] 16 HKCFAR 1 that in ascertaining the assets of a party to a marriage, the court is not restricted to taking into account only those assets which in law represent the property of that spouse.  The statutory inclusion of “other financial resources” includes assets or resources to which the party has or is likely (in the foreseeable future) to have access, even though he has no proprietary entitlement. 

Relationship between the Husband and the Mother

7.9.  It is clear that the Husband has throughout enjoyed a close relationship with the Mother and has been a natural object of her bounty.  In contrast, the Mother has been involved in litigation with other close members of her family, viz. her children by her late husband (the M children), her brother SH as well as her lover EH.

The Wife

8. The Wife was born in 1960.  She joined the entertainment industry at an early age but has a college degree in communications.  She ended her career after she married the Husband in 1989.  Thereafter she was involved in assisting the Husband with his projects as well as projects of her own.  At the time of the Part IIA trial, she was 53 years old. 

Living arrangements

9. As the date of the separation of the Husband and Wife is one of the issues on appeal, it is relevant to set out the evidence of their living arrangements.

9.1.   After their marriage the Husband and Wife stayed for a short time at Estoril Court, but then moved to serviced apartments.  They then moved back into Estoril Court but did not have exclusive use of the residence as it was also used as a residence at various times by the Mother and the M children. 

9.2.  A daughter was born in 1993 and a son was born in 1997.  Although they stayed briefly at Estoril Court, for most of their lives the children have lived in a unit in the Grand Panorama development (“the GP unit”) close to Estoril Court, with the Wife’s mother.  The registered owner of this unit was “ACE”, a Hong Kong company.  The original shareholders of this company were the Wife and her mother Madam Lai.  I shall refer to subsequent developments in the shareholding of this company later in this Judgment[4]. 

9.3.   The Husband has never stayed at the GP unit even though the children lived there. The Wife sometimes stayed with her own mother and the children at the GP unit, and sometimes with the Husband at Estoril Court.  The judge found that the matrimonial home was at Estoril Court (para.185).  There is no challenge to this finding. 

The Husband’s activities

10.1.   The judge found that “throughout the marriage, until 2009 when the spouses’ relationship deteriorated, the husband was never in any gainful employment, in other words, he did not have a job, nor did he need to have a job” (para. 531).  It would appear that the Husband and the Wife were involved with various projects, but “like most of the projects undertaken or rather, proposed to be undertaken by the spouses throughout their marriage, there were a lot of discussions/proposals, but ultimately came to nothing” (para. 328). 

10.2.   These passages lend some support to the submission of counsel for the Husband that he was not the creator of the wealth and assets that he enjoyed.  But of course, as discussed earlier in this Judgment[5], a spouse’s creation or proprietorship of assets is not the sole criterion when assessing ancillary relief.  The court also takes into account a party’s access to wealth and assets whether acquired through formal gifts or enjoyed habitually as an established way of life.

10.3.   In this particular case, the evidence showed that the Husband did not simply receive a regular allowance and the Mother was not simply a wealthy parent who alone created and managed her wealth without any input from or involvement of this son.  Rather, the Husband was actively involved in the Mother’s business affairs (other than her work at Macau Corp).  Moreover the Mother did not appear to be involved much (or at all) in some activities undertaken by the Husband involving substantial sums of money.

- Car collection

11. In the early 1990’s, the Husband acquired a collection of classic and expensive cars, which apparently has been sold. 

- Timepieces

12. The Husband was also very interested in collecting and trading valuable timepieces.  In the Part IIA trial, the ownership of 165 timepieces which were placed with Christie’s and sold by it between 2003 and 2011 (“the timepieces”) was one of the issues.  This will be discussed below[6].

-  Companies

13.1.   The Husband (and sometimes the Wife as well) had involvements in a number of companies as shareholders and/or directors.  Some of these companies were formed for the purposes of projects which came to nothing.  However some of them held valuable assets.

13.2.  The judge categorized the companies into the following groups (para. 192):

(i) WS (HK)

(ii) The AC Group

(iii) The Foundations

(iv) The Beijing Group

(v) The MV Group

(vi) The 3 Offshore Companies (“ACOHL(BVI)”[7], “WS (BVI)” and “SBI (Bahamas)”).

13.3.  Apart from the Beijing Group and the offshore companies, the rest are Hong Kong companies.

14.1.   On appeal, we were concerned with 3 offshore companies which hold shares in certain asset-holding Hong Kong companies (“the relevant Hong Kong companies”), in particular ACE and WS(HK) which held Hong Kong landed properties enabling the judge to assess their value.  There is little or no evidence about other companies whose shares were also held by the offshore companies, or the effect of such shareholdings on the value of the offshore companies.

14.2.  In respect of the relevant Hong Kong companies, one or both of the following events occurred.

(1) On 27 June 1997 (“Allotment Day”), a few days before the PRC’s resumption of sovereignty over Hong Kong, substantial numbers of shares were allotted to the offshore companies ACOHL(BVI) and WS(BVI).  The judge held that this exercise was undertaken for the purpose of wealth protection due to political concerns (para. 425). No other purpose was alleged by any party.

(2) On 27 September 2010 (“Disposition Day”) - after the Wife first petitioned for divorce - the Husband disposed of shares standing in his name in the relevant Hong Kong companies to ACOHL(BVI), although by that time, his registered shareholding had become a minority shareholding by reason of the allotment.

Proceedings

15.1.   The Wife first petitioned for divorce in Hong Kong in November 2009 on the basis of unreasonable behaviour.  She obtained an urgent interim maintenance order in February 2010.

15.2.   In May 2010 the Husband issued divorce proceedings in Thailand, where the parties were married. 

15.3.   In August 2010 the Wife obtained a maintenance pending suit order from the Family Court of Hong Kong (“the MPS Order”).  The Husband was ordered to pay $323,000 a month on top of various undertakings.

15.4.   In October/November 2010 the Husband obtained a divorce in Thailand by default.

15.5.  In December 2010 the Wife issued a second petition in Hong Kong for divorce on the ground of the parties’ separation. 

15.6.   Although the Wife had at one time applied in Thailand to set aside the Thai divorce decree, she eventually withdrew that application, and on 21 December 2011 she filed an application for leave to apply for financial relief under Part IIA.  

15.7.   On 14 March 2012 Poon J stayed the Hong Kong divorce proceedings and gave leave to the Wife to apply for financial relief under Part IIA.  He also gave an order “continuing the effect of the MPS Order”, even though technically the MPS Order was ancillary to the Hong Kong divorce proceedings. 

15.8.   Be that as it may, on 19 March 2012 the Wife filed an inter partes Originating Summons seeking financial relief, including periodical payments under s.29AD on the basis that she and/or the children were in “immediate need of financial assistance”.

15.9.   On 20 March 2012 at a hearing before Poon J the judge dealt with the proceedings as if they had been taken out under the Part IIA Application, and (subject to the Husband’s reservation of his right to apply to set aside the grant of leave) the parties dealt with the issue of periodical payments by treating the judge’s order of 14 March 2012 as having been made under the Part IIA Application (“the Interim Order”). 

15.10.  In the event the Husband did not apply to set aside the grant of leave for the Wife’s application under Part IIA. 

Part IIA Application

16. The trial of the Part IIA Application took 47 days.  The Husband and the Wife gave oral evidence. The judge found neither was entirely reliable (para. 67). Indeed the judge remarked in one passage that the Husband was “extremely economical with the truth” (para. 463) and that the Wife’s case was confusing at times (paras.254, 274 and 369).

17.1. The Husband’s case was that all of the assets considered in the proceedings belonged to the Mother.  That was challenged by the Wife.  Obviously the Mother would have been an important and material witness but she did not give oral evidence.  She proffered medical certificates to show that she suffered from various illnesses, and her cardiologist provided a letter to the effect that the stress from being cross-examined may be life-threatening.  The judge was of the view that the Mother could nevertheless have given evidence via video link, and in view of her refusal to testify, ruled that her affirmations would not be read (para. 66). 

17.2.  Other persons who gave evidence for the Husband included

-   CS, an attorney practising in the United States who appeared on the scene in the mid-1990's and has held Powers of Attorney from the Mother; and

-   Ms Lo, the Mother’s long-time assistant.

The judge found CS evasive (para. 73) and Ms Lo’s evidence was confusing and not reliable (para. 74).

18. Although the quantum of the net proceeds of Christie’s sale of the timepieces was in issue, the only evidence from that company came from three affidavits of their in-house counsel, and none of the parties sought to cross-examine the deponent.  Otherwise one of the issues arising on this appeal might not have arisen.

Judgment

19. On 26 March 2013 the judge handed down an admirably comprehensive 215-page judgment. In brief, the judge made the following orders:

(1)  the Husband undertook to pay university/school fees for the children and related fees of $15,000 a month;

(2)  from 1 April 2013, the Husband shall pay the Wife periodical payments of $50,000 for each child (superceding the MPS Order and Interim Order);

(3)  the Husband’s dispositions on Disposition Day of his registered shareholdings in some Hong Kong companies to ACOHL(BVI) were set aside;

(4)  the Husband’s summons dated 8 March 2012 for an order to vary the MPS Order was dismissed;

(5)  the Husband shall pay off all MPS Order and Interim Order arrears within 3 months (ie by 26 June 2013) failing which the Wife could restore a judgment summons which she had issued;

(6)  the Husband shall pay the Wife a lump sum of $120m within 3 months (ie by 26 June 2013);

(7)  upon the Husband’s payment of the lump sum, the Wife shall deliver up vacant possession of the GP unit where she and the children had been staying;

(8)  upon the Husband’s payment of the lump sum, the Wife shall transfer certain shares registered in her name to him;

(9)  upon the Husband’s payment of the lump sum, the Wife’s claim for financial relief would be dismissed;

(10)  liberty to apply.

Events subsequent to Main Judgment

20. As a result of various Hadkinson applications, the Husband has paid off the arrears of the MPS Order and the Interim Order.  The Mother has asserted that she is the source of the payments.  There is no evidence to the contrary. 

CACV80

21.1.   I shall deal first with the Husband’s arguments on appeal.  It was argued on his behalf that the judge had erred in the judgment and in making the order, in that:

(1)  the marriage had come to an end in 2004, not 2009;

(2)  he had no beneficial interest in the offshore companies which the judge held were partly owned by him, and which part-ownership was the main basis for the judge’s order for the payment of the lump sum of $120m;

(3)  none of the companies had been joined for the setting aside of the dispositions;

(4)  even if he did have any beneficial interests in the offshore companies, in assessing the value of his part-ownership of the offshore companies, the judge had failed to take potential liabilities into account;

(5)  he had no interest in the timepieces consigned to Christie’s and in any event the judge erred in finding that there was a surplus of $46.8m which arose from a misunderstanding of some documents from Christie’s;

(6)  he had no beneficial interest in “MVI HK”, a Hong Kong company, as the judge had found he had made a valid declaration of trust of his shares in it in favour of “WSL (BVI)”;

(7)  he had no beneficial interest in the money in certain “trust accounts”, whether held by him or by Ms Lo;

(8)  the Interim Order made by Poon J was invalid.

21.2.   The Husband argued that the judge was wrong to have ordered the payment of a lump sum and that periodical payments should have been ordered.

21.3.   As for the Wife, she supported the Main Judgment, but also argued that if the Husband had no beneficial interest in the offshore companies, he nevertheless owned the timepieces and the car collection, and in any event he had a beneficial interest in the “trust accounts”.

21.4.   I shall deal with the issues in the order set out above.

(1)  When did the marriage come to an end?

22.1.   The Wife’s case was that the marriage came to an end in 2009, whereas the Husband’s final case at the Part IIA trial was that it had ended in 2004.

22.2.   This issue is important in a case where the judge applies the “sharing” principle

(1)  because the duration of the marriage is one of the factors to be taken into account when the court assesses what is a fair distribution of the matrimonial estate or “pot”, and

(2)  when the court considers what assets have been acquired post-separation in determining the size of the matrimonial estate. 

23.1.   In the present appeal, the Husband’s primary case is that in fact he has never had any assets, but if the court were to reject that primary position, then his case is that the marriage came to an end in 2004 and any assets acquired after that date should not be counted as part of the matrimonial estate.

23.2.  It was common ground that there had been an incident on 10 August 2004 at Estoril Court at which the use of violence was alleged (“the 2004 incident”), and that after that incident the Wife no longer stayed overnight there.  She either stayed with the children in the GP unit, or at the Mother’s Old Peak Road apartment, or in an apartment in Beijing when she was there on business or for medical treatment.  

23.3.   There was indeed some support for the Husband’s case that the marriage had come to an end in 2004 from the Wife’s own evidence.

(1)  In her application to the Thai court to set aside the divorce decree, she had stated that after the 2004 incident, she was unable to cohabit with the Husband as a normal married couple and the Husband agreed to her moving out to live with the children (para. 167).

(2)  In her 14^th affirmation in the Hong Kong proceedings, she had also said that the marriage began to falter in or around 2004 and the spouses separated that year (para. 167).   

23.4.  The judge found that after the 2004 incident, the spouses no longer lived together in the same household (para. 173) but she found that nevertheless the marriage did not come to an end until 2009 when the Wife was excluded from the Husband’s residence at Estoril Court.

24.1.  On appeal the Husband referred to s.11C of the Matrimonial Causes Ordinance Cap 179 (“a husband and wife shall be treated as living apart unless they are living with each other in the same household”). 

24.2.   In my view this is a deeming provision for the purpose of determining when the parties separated as a ground for divorce, but it is not a deeming provision to the effect that if spouses are not living in the same household, the marriage must be treated as having come to an end. 

24.3.  The judge was aware of this provision (para. 139). She accepted that “often the commencement of living apart would signify the end of the marriage” but she noted that “this may not necessarily be the case” (para. 175).  Each case must depend on its own facts (para. 177). 

24.4.   I agree that continuous cohabitation is a highly important consideration when the court determines whether the parties are in a married state, but the court recognizes exceptions (WLK v TMC [2010] 6 HKC 571).

24.5.   In the present case, the spouses had not conducted their marital life as a typical nuclear family where a couple and their children would occupy a single residence as the matrimonial home.  The children lived most of their lives with their maternal grandmother at the GP unit and the Husband lived at Estoril Court which was nearby. The Wife divided her time shuttling between them, and also had a residence in Beijing.

24.6.  After the 2004 incident, the Wife no longer stayed overnight at Estoril Court, but she still kept her belongings there (para. 21), went there freely and frequently and visited the Husband there (until she was excluded in 2009).  The judge found the spouses’ relations were amicable (paras. 21 and 181).

24.7.   Importantly, in my view, the court must consider if “the reason for their separation is the contemplation of the end of their marriage” (EJB v CJB CACV16/2011, 28.9.2011, unrep at para. 92). 

24.8.   In the present case the judge found that although the Wife no longer stayed overnight at Estoril Court after the 2004 incident, even on their own respective cases, neither the Husband nor the Wife wanted to end the marriage at that time (para. 180).

24.9.   There was therefore evidence on which the judge was entitled to find that despite the fact that the spouses lived apart after the 2004 incident, “they continued to maintain their ... marriage until October 2009” (para. 182).  The weight of the evidence was of course a matter for the judge in the course of her fact-finding exercise, a matter with which an appellate court is slow to interfere. 

25. Accordingly I would uphold the judge’s finding that although the parties’ relationship started to sour at the end of 2008/early 2009 (para. 22), the marriage came to an end only in October 2009.  The marriage therefore lasted 20 years. 

(2) - (4) Offshore Companies

26.1.   These issues can be discussed together as they deal with the finding that the Husband had interests in the offshore companies, these companies’ absence from the proceedings and their valuation.

26.2.   Specifically, the Husband’s contentions on the numbered issues were[8]:

(2)  the Husband had no beneficial interest in any of the offshore companies which the judge held were partly owned by him, and which part-ownership was the main basis for the judge’s order for the payment of the lump sum of $120m;

(3)  the companies had not been joined;

(4)  even if the Husband did have any beneficial interests in the offshore companies, in assessing the value of his part-ownership of these companies, the judge had failed to take potential liabilities into account.

26.3.  These were the issues on which the parties on appeal have spent the most time. Before I discuss the submissions, I would briefly set out some relevant background.

- Background

27.1.   As mentioned above, the relevant offshore companies ACOHL(BVI), WS (BVI), and SBI (Bahamas) were all acquired shortly before the Allotment Day in 1997. Thereafter they received shares in the relevant Hong Kong companies, first through allotment and then through the Husband’s disposition. 

27.2.   First on Allotment Day in June 1997, ACOHL(BVI) and WS (BVI) were allotted substantial shares in the relevant Hong Kong companies.  This was done solely for the purpose of wealth protection due to political uncertainties.

27.3.  Subsequently in July 2009 (after the relationship between the Husband and the Wife had deteriorated when the Wife refused to hand over some chops to the Husband in April-May 2009), WS (BVI) was named as the beneficiary in the Husband’s declaration of trust of his 10% registered shareholding in MVI (HK), a company that had been associated with the shares in Macau Corp registered in the Mother’s name[9].

27.4.   Then in 2010, first in March and then on Disposition Day in September, ACOHL(BVI) was the disponee of the shares in the relevant Hong Kong companies standing in the Husband’s name even though by that time, ACOHL(BVI) already held the vast majority of the shares in those companies by reason of the allotments. ACOHL(BVI) was the disponee of shares in WS(HK), although on Allotment Day, the allotment of shares in this company WS(HK) was made to WS (BVI). 

-  Registered shareholding and directorships

28. The Certificates of Incumbency of 11 October 2012 show that through mutual cross-holdings the Mother was the legal holder of all the shares in these offshore companies.  The Husband was not a shareholder (although he was a director until he resigned in 2010).

29. The Husband’s case was that the Mother was the sole beneficial holder of all the shares in the offshore companies.  His counsel submitted that it was erroneous for the judge to have held that the Husband had a 50% beneficial ownership in the offshore companies purely on the basis of the Wife’s evidence, when it is established law that beneficial title follows legal title, and the burden of proof was on the Wife to show that the Husband had acquired a beneficial interest in the offshore companies.

-  Discussion

30. The approach of the court when considering the concept of burden of proof in ancillary relief proceedings was stated by Lord Sumption in Petrodel v Prest [2013] UKSC 34 as follows(para. 43-45):

“43 It follows from the above analysis that the only basis on which the companies can be ordered to convey the seven disputed properties to the wife is that they belong beneficially to the husband, by virtue of the particular circumstances in which the properties came to be vested in them. Only then will they constitute property to which the husband is ‘entitled, either in possession or reversion’. This is the issue which the judge felt that he did not need to decide. But on the footing that he was wrong about the ambit of section 24(1)(a), it does need to be decided now. The issue requires an examination of evidence which is incomplete and in critical respects obscure. A good deal therefore depends on what presumptions may properly be made against the husband given that the defective character of the material is almost entirely due to his persistent obstruction and mendacity.

44 In Herrington v British Railways Board [1972] AC 877, 930-931, Lord Diplock, dealing with the liability of a railway undertaking for injury suffered by trespassers on the line, said:

‘The appellants, who are a public corporation, elected to call no witnesses, thus depriving the court of any positive evidence as to whether the condition of the fence and the adjacent terrain had been noticed by any particular servant of theirs or as to what he or any other of their servants either thought or did about it. This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold. A court may take judicial notice that railway lines are regularly patrolled by linesmen and Bangers. In the absence of evidence to the contrary, it is entitled to infer that one or more of them in the course of several weeks noticed what was plain for all to see. Anyone of common sense would realise the danger that the state of the fence so close to the live rail created for little children coming to the meadow to play. As the appellants elected to call none of the persons who patrolled the line there is nothing to rebut the inference that they did not lack the common sense to realise the danger. A court is accordingly entitled to infer from the inaction of the appellants that one or more of their employees decided to allow the risk to continue of some child crossing the boundary and being injured or killed by the live rail rather than to incur the trivial trouble and expense of repairing the gap in the fence.’

The courts have tended to recoil from some of the fiercer parts of this statement, which appear to convert open-ended speculation into findings of fact. There must be a reasonable basis for some hypothesis in the evidence or the inherent probabilities, before a court can draw useful inferences from a party’s failure to rebut it. For my part I would adopt, with a modification which I shall come to, the more balanced view expressed by Lord Lowry with the support of the rest of the committee in R vInland Revenue Comrs, Exp TC Coombs & Co [1991] 2 AC 283, 300:

‘In our legal system generally, the silence of one party in face of the other party’s evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Thus, depending on the circumstances, a prima facie case may become a strong or even an overwhelming case. But, if the silent party’s failure to give evidence (or to give the necessary evidence) can be credibly explained, even if not entirely justified, the effect of his silence in favour of the other party, may be either reduced or nullified.’

Cf Wisniewski v Central Manchester Health Authority [1998] PIQR P324, P340.

45   The modification to which I have referred concerns the drawing of adverse inferences in claims for ancillary financial relief in matrimonial proceedings, which have some important distinctive features. There is a public interest in the proper maintenance of the wife by her former husband, especially (but not only) where the interests of the children are engaged. Partly for that reason, the proceedings although in form adversarial have a substantial inquisitorial element. The family finances will commonly have been the responsibility of the husband, so that although technically a claimant, the wife is in reality dependent on the disclosure and evidence of the husband to ascertain the extent of her proper claim. The concept of the burden of proof, which has always been one of the main factors inhibiting the drawing of adverse inferences from the absence of evidence or disclosure, cannot be applied in the same way to proceedings of this kind as it is in ordinary civil litigation. These considerations are not a licence to engage in pure speculation. But judges exercising family jurisdiction are entitled to draw on their experience and to take notice of the inherent probabilities when deciding what an uncommunicative husband is likely to be concealing. I refer to the husband because the husband is usually the economically dominant party, but of course the same applies to the economically dominant spouse whoever it is.”

31. In the present case the judge found the Husband’s evidence unreliable.  His evidence was inconsistent in some respects, and in some others, he was exposed as being “extremely economical with the truth” (para. 463). 

32.1.   As far as the offshore companies were concerned, the judge found that discovery was incomplete (para. 418).  I pause here to address the argument made by the Husband’s counsel that the judge had found forgery without applying the relevant stringent requirements.  I do not read the passages in paras. 397-414 as a finding of forgery by the judge.  Rather, her ladyship was recounting the way in which various documents regarding the legal title were sought from the registered agents in a piecemeal fashion by CS over a period of time, and how even by the time of trial, some documents pertinent to beneficial title had still not come to light.

32.2.  In those circumstances, the judge had to consider the issue whether the Husband had any interests in the offshore companies by reference not only to evidence from the offshore companies, but also to evidence regarding the relevant Hong Kong companies which they hold.

32.3.   In the discussion following, I will focus on ACE and WS(HK) as there are more materials available which render the position clearer.  (Further as these companies hold landed properties in Hong Kong, valuations were possible and provided the judge with a yardstick for the assessment of ancillary relief).

33.1.   In my view, in answering the question whether the Husband had interests in the offshore companies, it is relevant to consider first why the allotments to the offshore companies took place.  There is no dispute that the allotments were undertaken due to political uncertainties in Hong Kong and for the purpose of protecting the wealth of the individuals controlling the companies.  It was never suggested that the allotments were done because the Hong Kong companies required an injection of funds from newinvestors in the form of the offshore companies.

33.2.   It follows that the allotments could not have been intended to disturb the existing (pre-allotment) stakes of the individual owners in the Hong Kong companies.  Certainly there was no evidence that the allotment was intended to divest any existing shareholders of their real substantive interests in those companies.  The Husband’s case was never that although he was originally beneficially interested in a certain portion of the shares in the Hong Kong companies, he had agreed (through the allotment to the offshore companies) to dilute his shareholdings to a negligible portion in favour of the offshore companies from which ownership he was excluded.

33.3.  Therefore when we consider whether the Husband has interests in the offshore companies which were formed to hold the Hong Kong companies, guidance may be obtained by examining whether he had interests in or control over the Hong Kong companies pre-allotment (as shown by his connections with and control of these companies), and whether he continued to enjoy the use of the companies’ underlying assets post-allotment.

34. In my view, in light of the matters set out in the following paragraphs, the Husband did have beneficial interests in or control over ACE and WS(HK) pre-allotment.  Given the wealth protection purpose of the allotment, the Husband’s pre-existing interests or control provided an evidential basis for the judge to hold that the Husband had a 50% interest in the offshore companies, or at least his ability to access the underlying assets of their subsidiaries (the Hong Kong companies) was such that her ladyship was entitled to use that proportion to assess his financial resources.

ACE

35.1.   First, ACE’s personal connection with the Husband was manifest.  It holds the GP unit where he housed his children rent-free and the Hunghom office where he kept the classic cars he had collected, and it was the provider of all the family’s expenses including credit card expenses of the Wife’s mother Madam Lai.  It held 16-17 safe deposit boxes of which the only signatories were the Husband, the Wife and her mother Madam Lai. 

35.2.  Pre-allotment, the only registered shareholders of ACE were the Wife and her mother Madam Lai.  Both had executed declarations of trust in favour of the Husband.  The Husband’s case was that it was the Mother (and not himself) who was the sole beneficial owner of those shares but the Mother had asked him to arrange for the Wife and Madam Lai to be registered as shareholders and to sign declarations of trust for him as he was then involved in litigation.  That does not stand up to reason.  As the judge noted (para. 252), that does not explain why the Mother herself was not registered as a shareholder, nor does it explain why the declarations of trust were not in favour of the Mother.  Accordingly it is clear that the judge was entitled to hold that the Husband was the beneficial owner of 50% of ACE.

35.3.   Although the Mother may have paid for the GP unit (and other expenses of ACE), it is not necessary to determine whether and if so how these payments were booked in this company’s accounts, because for present purposes the court is not confined to looking at proprietary rights and obligations as in an arms-length commercial scenario.  Rather the evidence before the court pointed to a very close relationship between an extremely wealthy parent and a favoured child. 

35.4.  Post-allotment to ACOHL(BVI) and even after Disposition Day, the Husband’s connections with and control of ACE continued.  The children continued to live at the GP unit and the family’s expenses continued to be paid by ACE. 

35.5.   What is revealing also is the fact that after allotment and disposition, and even after the Wife started proceedings, the Husband assigned to ACE two club debentures, at Aberdeen Marina Club and the Macau Golf and Country Club, for $1.6m. These were debentures for individuals and only the Husband could enjoy the use of the clubs.  It is obvious that no commercial benefit was gained by ACE from this assignment and none was suggested, whereas the Husband obtained substantial funds from the assignment and yet continued to enjoy the clubs’ amenities as well.  The Husband’s access to the assets of ACE and his continued enjoyment of them, both before and after allotment and disposition to ACOHL(BVI), is evident.

WS(HK)

36.1.   As for WS (HK), it holds the two units in Estoril Court where the Husband lived (and which was found by the judge to be the matrimonial home) as well as another unit in Kennedy Road where the M family used to live.

36.2.   Originally the shares in this Company were held as to 50% by the Mother and 50% by WM, one of the M children.

36.3.   In 1992, one share was allotted to the Husband and one to the Wife.  The couple, and the Mother and WM therefore each held 25% of the company.  Since the Mother was already a registered shareholder, the judge was entitled to find that the shares to the Husband and Wife were gifts rather than shares held on trust for her, as the Husband claimed. 

36.4.  In 1995 the Husband was allotted an extra share.  He said this was to set off a debt due by the company to him.  Therefore on his own case, he had given consideration and that share must have been his to hold beneficially. 

36.5.   Pausing there, the Husband alleged at the trial that at that stage he was already holding his shares on trust for WS(BVI).  As the judge noted, that could not possibly be the case as WS(BVI) had not even come into existence yet.

36.6.   Then on Allotment Day in 1997, there was an allotment of a substantial number of shares to WS(BVI) and 1 share to SB (Bahamas).  As discussed with regard to ACE, given the purpose of the allotment, there would not have been an intention to divest any existing shareholders of their real substantive interests in the company. 

36.7.   It would be noted that even though the shares then standing in the Husband’s name were severely diluted by the allotment to WS(BVI), he continued to live at Estoril Court as before, rent-free.

36.8.  Then in 2002, at a time when the relationship between the Mother and the M Children had deteriorated to the stage of their suing her, WM transferred his share to the Mother who on the same day transferred it to the Husband.  As the judge rightly pointed out, the Mother was a registered shareholder anyway, and there was no reason why she would need to transfer it to the Husband to hold in trust for her.  It was therefore obviously intended for him to hold for himself.  

36.9.   Then on Disposition Day in 2010, the Husband disposed of his shares to ACOHL(BVI) even though he had alleged that he held his shares on trust for WS(BVI).  His evidence about having “pre-signed” the document of transfer was rejected by the judge (para. 219). 

37.1.  As I have discussed earlier, a sign that the Husband has beneficial interests in the offshore companies, or access to their wealth and assets, is his free use of their assets for his own personal purposes. 

37.2.  I have referred to his continued housing of his children rent-free in the GP unit and his continued personal use of club memberships which he sold to ACE for $1.6m.  As for WS(HK), he had also continued to live rent-free at Estoril Court (at least for some time, although he claimed to have moved to a small unit in Mongkok), even though the shares standing in his name had been substantially reduced from 60% (3 of 5 total shares allotted) to 0.3% (3 of 1000 total shares allotted).

37.3.   Further his free use of assets for personal purposes was not confined to the underlying assets of the subsidiary companies.  In 2008-2009 he used ACOHL(BVI)’s funds (US$250,000) for a donation he made to an American university in honour of his father EH.  In seeking to explain why ACOHL(BVI) would make such funds available for his personal purposes, the Husband said at first that he had borrowed them from ACOHL(BVI) where he worked as a marketing consultant.  However it transpired that the first tranche had already been transferred before his employment.  The Husband further said that the loan would be set off against his pension.  However he then admitted that he was not even entitled to a pension.

Conclusion on the Husband’s beneficial interests

38. In my view, all this evidence points towards the conclusion that the Husband had beneficial interests in at least ACE and WS(HK), valuable Hong Kong companies, before the allotments to the offshore companies.  The allotments in 1997 were for purely wealth protection reasons and there was no evidence that the allotments were intended to detrimentally affect his real interests in the Hong Kong companies.  The dispositions in 2010 were purely an attempt to thwart the Wife’s application for ancillary relief.  The Husband’s continued access to and enjoyment of the assets, not only of these subsidiary Hong Kong companies, but also of the offshore holding company ACOHL(BVI) was evidence which supported the judge’s finding that he was entitled to 50% of the offshore companies.  At least this served as a guide to the degree of his access to their wealth and assets which he enjoyed habitually as an established way of life.

39. I am mindful of the fact (as mentioned earlier)[10] that the offshore companies had been allotted shares in other companies as well, of which less is known.  However the judge’s assessment of ancillary relief was primarily based on the valuations of the landed properties held by these two companies. Moreover because of the cross-holding between the 3 offshore companies, it seems clear that they can in substance be regarded as one organization.

40. This is an ancillary relief exercise, and as mentioned previously, the court is not hampered by strict property lines.  Its task is to look at the reality of the situation from past conduct and to arrive at an assessment of the financial resources available to a party.  As the Court of Final Appeal held in KEWS (para. 37):

“It goes without saying that … the court must look at the reality of the situation and have regard to matters of substance and not just form. In looking at reality, the court can take into account not only what a party actually has, but also what might reasonably be made available to him or her if a request for assistance were to be made”.

41. I now turn to the Husband’s complaint in issue (3) that none of the asset-holding companies (Hong Kong or offshore) had been joined. 

41.1. It is correct that the companies did not appear at the trial. However, they were aware of the proceedings.  Notice of the Wife’s application to set aside the Husband’s dispositions of the shares standing in his name to ACOHL(BVI) and WS(BVI) was given to the companies.  Even though that was at a late stage, as the judge remarked (para. 220), the trial took place over two months and there was ample opportunity for the companies to intervene.  They did not. 

41.2.   In any event, the Husband’s focus is not on enforceability.  Counsel for the Husband argued that because the companies had not been joined, the judge was “stuck with no/insufficient evidence”.  With respect, that is an artificial argument.  The case of the Husband and the Mother was that she was the legal and beneficial owner of all the companies.  Three years had passed between the time of the parties’ separation (October 2009), when the spectre of a battle for ancillary relief must have loomed large in all parties’ minds, and the trial itself (October 2012).  The Mother had long been advised by CS, a lawyer to whom she had given a power of attorney, and she was also represented by counsel at the trial.  She had also been assisted by Ms Lo for decades.  With professional and administrative help, it cannot be suggested that she could not supply further evidence if she had wished to.

41.3.  As far as the beneficial ownership of the shares in the companies was concerned, assuming that BVI law and Bahamas law are the same as Hong Kong law (as to which there is no expert evidence to the contrary), a company is not concerned with beneficial title.

42.1.   As for issue (4), the Husband’s complaint is that the judge had applied the agreed net values of the real properties and this was inaccurate for the purposes of valuing the offshore companies as “this took no account of any potential liabilities of each company, which were realistic possibilities given their credit history” (emphasis added). 

42.2.   It is correct that at one stage, WS(HK) had up to $800m in liability, but by the time of trial this was reduced to mortgage liabilities which had been taken into account before the net values of the real properties were agreed.  There was no evidence that the $800m liability was a recurring debt or indeed that there were likely to be any substantial liabilities in the reasonably foreseeable future.  In the absence of full disclosure of audited accounts and reliable evidence from the management, the judge cannot be asked to speculate what “potential liabilities” there might be.

(5) Husband’s beneficial interest in the timepieces and the calculation of the surplus

43. The Husband had been interested in valuable timepieces since the early 1990's.  He had been personally involved in litigation in Hong Kong in 1991.  In that judgment he was already described as having been involved in a long course of trading.  In the early to mid-2000’s, the Husband was preparing for litigation with SH.  As some timepieces had been stored overseas, the Husband instructed the Wife to arrange for their consignment to Christie’s for sale.  This led to inquiries being made with Christie’s in the Part IIA Application.

44.1.  A subpoena was issued to Christie’s in 2012 and questions were put on paper and answered in 3 affidavits[11] by Christie’s in-house counsel Miss Heaton.  Because of the way in which the answers were provided in answer to specific questions from different parties, the following information was disclosed in a piecemeal fashion:

- on Christie’s confidential records, the Husband was named as the client of a numbered account set up in 2004;

- there was a Consignment, Advance and Security Agreement dated 27 July 2006 (“the 2006 CAS Agreement”) naming 3 joint sellers, viz the Husband, ACOHL(BVI)[12] and ACIL  (a Hong Kong company incorporated in 1991 and held as to 2 shares by the Husband and 1 share by the Wife), which was signed by the Husband on his own behalf and on behalf of these companies;

- there were instructions from Christie’s Inc in New York that as global advances had been made against the timepieces, all proceeds and unsold items should be held by Christie’s before settlement;

- electronic bank transfer records showed that in 2008-9, advance payments had been made variously to escrow accounts of CS’s law firm (US$1,475m), the Husband (US$725,000) and an account of ACOHL(BVI) (US$1.3m);

- a heading “Advance to Mr Mak” on one of Christie’s internal documents appeared to be only internal shorthand used to identify the advances and consignments made under various CAS Agreements, including the one in 2006;

- Miss Heaton inferred that on 21 December 2011, the amount of USD1,482,060.37 was wired to the client[13];

- there was no amount outstanding as at 26 October 2012 although Christie’s was holding 9 items;

- the 9 items were subsequently delivered on 7 November 2012 to the client’s agent.

44.2.  Various documents, including some spreadsheets tracking pay down of advances and reconciliations[14] and an excerpt from electronic payment records[15], were produced by way of exhibits. 

45.1.  The spreadsheets showed details of advances and proceeds.  They showed that the earliest advance was made in July 2003, before the account was set up (according to the in-house counsel, in 2004), which was a short term advance of US$5m.  Larger advances followed.  It should be noted that in June 2005 there was a long term loan of more than US$13m, which was then moved to a line of credit in 2007. Proceeds of sales in Geneva, Hong Kong and other cities were credited against these advances and there were also occasional repayments. 

45.2.   It is apparent from the spreadsheets that the excerpt of the electronic payment records was literally an excerpt and did not cover other payments made by Christie’s.

46.1.   The judge rejected the Husband’s argument that all the timepieces were the Mother’s.  The Mother had no involvement at all in the CAS Agreement of 2006, whereas the Husband had signed it on behalf of all 3 sellers.  To that evidence can be added the evidence of his previous course of trading in timepieces, his role in their choice and maintenance, his instructions to the Wife to arrange for their consignment to Christie’s, and Christie’s understanding that he was the client for whom they had opened the numbered account.

46.2.   Based on the number of joint sellers, the judge found that the Husband was the beneficial owner of at least one third of the timepieces, together with the 9 remaining items which had been collected by his agent.  In my view the evidence supported that finding. 

47. The Husband’s further complaint on appeal was in respect of the sum attributed to that ownership.  The judge took the gross proceeds of sale to be approx US$68m, deducted from that sum advances of approx US$50m, and arrived at a surplus rounded up to US$18m (para. 479).  Applying the Husband’s one third beneficial interest to that sum, her ladyship arrived at US$6m, which was converted to HK$46.8m (para. 482). This was the figure which was included in the calculation of the Husband’s approximate net value asset at para. 543.

48.1.  With respect to the judge, it is difficult to reconcile this surplus with the spreadsheets which show that the surplus was only US$46,063.91.  It seems likely that the US$50m sum the judge referred to as “advances” did not include the long term loan of US$13m which was moved to a “line of credit” in 2007 but which was not entered in the spreadsheets as an “advance” or interest. 

48.2.  I should also point out an error in Miss Heaton’s affidavit.  She stated that “the comment in the last entry dated 19 Dec 2011, at page 11 of Exhibit MH-8[16], indicates that the amount of USD1,482,060.37 was wired to the client on 21 December 2011”.  However it is clear from the spreadsheets and the comment regarding cell J570 (the last entry) that the sum wired was only US$46,063.91. 

48.3.   Accordingly I take the view that the sum of HK$46.8m in para. 543 should be substituted by the sum of HK$120,000, which is rounded up from HK$119,766 (one third of US$46,063.91 converted to HKD) as the value of the 9 remaining items collected by the Husband’s agent is unknown.

(6) Should the judge have made a finding of the Husband’s beneficial interest in MVI(HK) in view of his declaration of trust of his shares in favour of WSL (BVI)?

49. Counsel for the Husband submitted that the judge was wrong to include the item “1000 out of 10,000 shares in MVI(HK)” with “unknown value” in the table of the Husband’s beneficial interests in para. 543 because her ladyship had accepted that he had made a declaration of trust of those shares. 

50. With respect, I think that is a misreading of the table of assets in para. 543, as I will seek to explain after a brief narration of the background facts.

51.1.  MVI(HK) is significant in the longstanding dispute between the Mother and EH (and possibly also SH) regarding the shares standing in her name in Macau Corp.

51.2.  The following appears to be the position based on the evidence before the judge. 

51.2(a).  In 1983 the Mother transferred the 6,251 shares[17] in the Macau Corp registered in her name to an offshore company MVI(P) without approval by the Macau Government or registration by Macau Corp.

51.2(b).  MVI(P) was held initially by way of bearer shares.  On 31 July 2001 by way of 3 resolutions made one after the other (referred to in the Main Judgment as the “3 Minutes”) it was resolved that (1) the bearer shares be converted to registered shares, (2) such shares be registered in the Husband’s name and (3) the same shares be transferred by the Husband to MVI(HK). 

51.2(c).  MVI(HK) was at that time held as to 50% by the Mother and 50% by the Husband.

51.2(d).  On 14 January 2002, MVI(HK) allotted certain shares to the Mother, with the result that the Mother held 90% and the Husband 10% of this company. 

51.2(e).  On 27 June 2005, MVP made a Deed of Gift of 6,000 of the 6,251 shares in the Macau Corp to a “foundation”, MVF.  In the Deed of Gift, the Husband acknowledged that the Mother was the sole beneficial owner of the Macau Corp shares.

51.2(f).   Then on 23 July 2009 the Husband made a declaration of trust of the 10% shares in MVI(HK) standing in his name in favour of WS(BVI).  It would appear that the Wife has not applied to set aside this declaration of trust.

51.2(g).  On Disposition Day in 2010, the Husband transferred the 10% shares in MVI(HK) standing in his name - after he had made a declaration of trust of them to WS(BVI) the previous year - to WS(BVI).

52. The Macau Corp shares are the subject of litigation between EH and the Mother, and the Mother’s transfer of the shares to MV(P) has also been the subject of proceedings commenced by the M children.

53. On the first day of the trial before the judge, the Wife stated through her counsel that she would not ask the judge to decide the beneficial interests in the shares of Macau Corp.  The Husband submits on appeal that it was therefore wrong for the judge to include the item in the list of the Husband’s beneficial interests.

54. With respect I think that is a misreading of the table.  The judge was well aware that she had been asked not to make any decision as to who holds the beneficial title in the Macau Corp shares.  The item simply sets out the Husband’s 50% beneficial interest in WS(BVI).  WS(BVI) holds shares in MVI(HK), which in turn holds shares in MVP, which purportedly holds the remaining 251 shares of the Macau Corp.  Whatever the assets of MVP may be, that does not affect the finding that the Husband holds 50% beneficial interest in WS(BVI), a parent company two levels up the corporate structure.  The fact that the judge put “unknown” against the value of WS(BVI)’s shares in MVI(HK) is a clear reflection of the judge’s understanding that the beneficial interest in the Macau Corp shares remained undetermined. 

(7) Did the Husband have beneficial interests in the money in certain trust accounts, whether held by him or by Ms Lo?

55. The Husband held various bank accounts which were called trust accounts although they had not been designated as such.  He said they all belonged to the Mother but his explanation as to how these accounts were established and operated were rejected by the judge (para.489).  Those were findings of fact which the judge was entitled to make on the evidence, and with which an appellate court will not interfere.

56. The judge found that the moneys in the accounts were used for the Husband’s expenses, the Mother’s expenses and the expenses of the companies.  That use is not inconsistent with the finding that the Husband was a 50% beneficial owner of the accounts. 

57.1.   I do not intend to further lengthen this Judgment with a detailed discussion of the scope of the presumption of advancement or its weight in modern society.  In my view such a discussion may be necessary in a case where one or more parties to the gift have died and nothing is known of their previous conduct.

57.2.   In the present case the evidence points towards an extremely wealthy parent and a favoured child who habitually enjoyed the wealth and assets she bestowed upon him.  In a case of ancillary relief, especially one where the Husband was found to be an unreliable witness and the Mother had failed to give evidence, the judge was perfectly entitled to draw adverse inferences against the Husband and to arrive at the conclusion that she did.

(8) Was the Interim Order made by Poon J valid?

58. As mentioned earlier, Poon J had made an MPS Order before the complication created by the commencement of the Thai proceedings. 

58.1.  On 14 March 2012 Poon J stayed the Hong Kong divorce proceedings and gave leave to the Wife to apply for financial relief under Part IIA.  He also gave an order “continuing the effect of the MPS Order”, even though technically the MPS Order was ancillary to the Hong Kong divorce proceedings which he had just stayed.

58.2.  The Husband complains that accordingly the Order is invalid and the judge (DHCJ Chu) should not have treated it as valid.  With respect that is an unmeritorious argument.  Whatever language Poon J had used, it is clear that his intention was to enable the Wife and children to continue to receive maintenance at the same rate as the MPS Order he had made, and the parties subsequently dealt with the issue of periodical payments by treating the judge’s order of 14 March 2012 as having been made under the Part IIA Application.

Order

59. Accordingly I would dismiss the Husband’s appeal save to the limited extent required by the alteration to the figure set out as the value of the timepieces.  I would direct that a draft order (if possible agreed between the parties) be provided within 28 days for the court’s approval.

CACV81

60. The Wife’s appeal against the Main Judgment can be disposed of shortly as much of the material has been covered in the discussion above. 

61. The Wife submitted that the judge was being “overly indulgent” to the Husband in finding that he had only a 50% beneficial interest in ACOHL(BVI), that submission being based partly on the assumption that the GP unit (owned by ACE, a subsidiary of ACOHL(BVI)) was the matrimonial home. 

62. With respect, that assumption is incorrect.  The GP unit was not the matrimonial home, but the more important point is that it is inappropriate for an appellate court to re-visit this type of holding in the absence of any palpable error by the judge, especially when the judge has substantial experience in family cases both as a practitioner and on the bench, and who had seen and heard the witnesses give evidence in a case which took nearly 50 days.  As Lord Hoffmann said in Biogen Inc v Medeva plc [1997] RPC 1 and repeated in Piglowska v Piglowski [1999] 1 WLR 1360:

“The need for appellate caution in reversing the trial judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impressions which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance .... of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation”. (Emphasis added).

63. As for the Wife’s submissions in respect of WS(BVI), the same point applies.  Moreover it must be remembered that although the Husband lived at Estoril Court which the judge found was the couple’s last matrimonial home, it was not his exclusive residence.  The Mother and for some time the M children lived there as well. 

64. The Wife’s other submissions are also really appeals against the judge’s findings of fact or weight or proportion of discount, in respect of which no palpable error has been shown. 

65. I would dismiss this appeal.

CACV83

66.1.  The case of the Husband and the Mother was that she had made a gift of 6,000 shares out of 6,251 shares she owned in Macau Corp to MVF.  MVF was also made a party to, and took part in the hearing of, the Part IIA Application.  It lodged an appeal against the Main Judgment (CACV82/2013). However at the commencement of the appeal, the Wife through her leading counsel made it clear that she was not saying that the foundation was a sham, nor that the Husband has interests in it or its assets, nor was she asking the court to make any determination of the beneficial interests in the shares of Macau Corp purportedly transferred to MVF.

66.2.  In those circumstances, we determined that MVF had no legal interest in the order of the judge against which it could appeal, and its appeal was accordingly dismissed.

Costs

67. Finally I would direct the parties to provide written submissions (limited to 10 pages each) on the costs of these appeals within 42 days of the date of this Judgment, after which we will give a written decision on costs of the appeals, as well as the costs of the other parties (4^th - 6^th respondents) in the Part IIA Application and their brief appearance on appeal.

68. Finally I wish to thank all counsel for their assistance and to apologize for the time taken to deliver this judgment. 

Hon Barma JA:

69. I agree with the judgment of Yuen JA.

Hon McWalters JA:

70. I agree with the judgment of Yuen JA.