XCHRX CHAN TING WAI, WILLIAM v. LAM SAI PAK AND ANOTHER

HCA2587/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.A2587 OF 1997

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J U D G M E N T

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1. The Plaintiff in this action obtained judgment against the 1st Defendant on 12th November 1997. The judgment was for the sum of $300,000.00 with interest and cost. The claim against the 1st Defendant was in respect of a loan which the 1st Defendant took from the Plaintiff on 25th May 1996. A post-dated cheque was given to the Plaintiff post-dated to 25th November 1996. The cheque was presented for payment on 21st February 1997 but was dishonoured and the writ was issued on 12th March 1997. The 1st Defendant did not defend the proceedings but in fact admitted the claim and judgment was entered on 4th November 1997.

2. The 2nd Defendant is the wife of the 1st Defendant and there is one child of the family.

3. By a charging order nisi made on 10th December 1997, the Plaintiff obtained a charging order nisi whereby it was ordered that the 1st Defendant's interest in the property known as Flat K, 37/F, Block 6, On Ning Garden, No.10 Sheung Ning Road, Tseung Kwan O, Sai Kung, New Territories do stand charged with the payment of the judgment sum together with interest and costs.

4. The property Flat K, 37/F, Block 6, On Ning Garden, No.10 Sheung Ning Road, Tseung Kwan O, Sai Kung, New Territories was in fact the matrimonial home of the 1st and 2nd Defendants and the place where the child lived. The premises were purchased in February 1991. By an assignment made on 20th February 1991, the premises were assigned to the 1st and 2nd Defendants as joint tenants. This was a flat purchased under the Home Ownership Scheme and was subject to the provisions of the Housing Ordinance.

5. Before the charging order nisi was made, however, the 2nd Defendant had already filed her petition for divorce. That was done in August 1996. The sealed copy of the petition for divorce was registered in the Sai Kung Land Register against the property on 20th November 1997. That was because the 2nd Defendant had a claim for ancillary relief in respect of, inter alia, the property. The sealed copy of the charging order was registered on the 27th December 1997 and, as I have said, the order was made after the 2nd Defendant had commenced her proceedings for divorce and indeed after the date of registration of her sealed copy of petition for divorce in the Sai Kung Land Register against the property.

6. In the divorce proceedings in the District Court, a custody order has already been made in favour of the 2nd Defendant. However, she has applied for a transfer of property order and that application together with her application for ancillary relief has been adjourned to be heard on a date to be fixed. I understand from counsel for the 2nd Defendant that there is to be a hearing on Friday 11th December 1998 and counsel has given an undertaking that at that hearing an application will be made for the matrimonial proceedings to be transferred to the High Court. It has been submitted by counsel for the 2nd Defendant that the proceedings before Master Poon namely, whether the charging order ought to be made absolute, should be determined shortly after or at the same time as the Court dealing with the claims for ancillary relief in the matrimonial proceedings.

7. Counsel referred me to Jackson's Matrimonial Finance and Taxation 6th edition where it is stated that:

"where a charging order is sought in respect of a property occupied as a matrimonial home, the position of the spouse of the judgment debtor requires separate consideration".

8. It is also stated at para.22.35.1 of Jackson's Matrimonal Finance and Taxation that the principles that the court should adopt in a such a case were considered by Balcombe L.J. in Harman & Glencross who stated that the court had a proper concern to ensure that a spouse's rights of occupation were adequately protected.

9. It is also stated there that if the charging order nisi has been made after the spouse's petition for divorce, then the court should consider whether the circumstances are such that it is proper to make a charging order absolute before the spouse's application for ancillary relief has been heard. The usual practice would be to transfer the application for the charging order to the court deciding the issue of ancillary relief. The authority in support of that proposition is Harman v Glencross [1986] Fam. 81. It was held there, inter alia, that where the order nisi has been made after the wife's petition, the court should consider whether it is proper to make the order absolute, even before the wife's application for ancillary relief has been heard. The usual practice should be to transfer the application to the Family Division to come on together with the application for ancillary relief so that one court can consider all the circumstances of the case.

10. That seems to me to be a sensible course. The court, of course, has a discretion whether or not to make a charging order either nisi or absolute and before it does so, it should consider all the circumstances of the case including circumstances of any other creditor and more particularly, the position of the spouse of the judgment debtor requires separate consideration.

11. I accept counsel's undertaking that an application will be made to transfer the divorce proceedings to the High Court. On that basis, I allow the appeal to set aside the charging order absolute. The charging order nisi is stayed and the application for making that order absolute is to be adjourned and to be dealt with by the Court seised of the matter of the application for ancillary relief and transfer of property order in the divorce proceedings. I order that those proceedings be heard at the same time as the application for an order that

the charging order be made absolute. The appeal is allowed to the extent that I have mentioned above.