C v. C

Headnote

C v. C

Family Law - ancillary relief - application for leave to apply for transfer of property order - s 25(2)(6) of Matrimonial Proceedings and Property Ordinance - test to be applied - meaning of "property".

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 1991 OF 1995

-----------------

-----------------

JUDGMENT

-----------------

1. This is an application by the Petitioner (Wife) for leave under S 25(2)(b) Matrimonial Proceedings and Property Ordinance (Cap 192) to apply for a transfer of property order.

2. The background to the application is that the parties married on 17^th November 1997. They have three children all daughters who are now aged 21, 18 and 17 respectively. The parties separated in October 1992 and a decree nisi based on two years separation with the Respondent's (Husband) consent was pronounced on 3^rd August 1995. On the same date and by consent an order was made for $1 a year nominal maintenance to the wife and $1,800 per month for the three children. This sum has since been increased to $7,000 a month. In her petition the wife had also prayed for a lump sum order for herself and the children but had not sought any property adjustment order. The consent order made no reference to the lump sum application. On 11^th March 1999 the wife filed an application for an increase in the maintenance payable under the consent order. That application has been adjourned sine die.

3. On 28^th July 1999 the wife filed a notice of intention to proceed with her lump sum claim and a further notice for leave to apply for a property adjustment order. It is this latter application that is now before the court.

4. In her affidavit the wife explains that at the time of the decree nisi she only pursued her prayer for maintenance for the children as the husband was only earning $16,000 a month as a foreman for the Urban Services Department. She accepted that apart from the matrimonial home he had no significant assets. In any case she herself was then working in her mother's knitting factory. Therefore she did not proceed with her claim for a lump sum. As for the matrimonial home this was a village house in the New Territories worth around $150,000. If that had to be sold and the proceeds divided the resulting sum would hardly be enough even for a deposit for alternative accommodation.

5. The situation though has changed significantly since the making of the consent order. Until 1986 the matrimonial home was registered in the name of the husband's father. In 1986 he assigned the property to the husband by way of gift. In 1994 the husband assigned it to his mother by way of gift who in turn assigned it back to the husband by way of gift in December 1997. Then at midnight on 16^th January 1999 the lot on which the property stands "reverted to the state for the use of the Government of the HKSAR" according to a remark on the relevant extract from the Land Registry. Notice of this resumption had been gazetted on 15^th October 1998.

6. The land in question (together of course with other land) has been resumed by the government for the purposes of the West Rail project. The consequences of this resumption are that the Husband has been given two options by the government. In his affirmation of 26^th July 1999 the husband explains that he had the option of either an ex gratia sum of $5,931,000.00 (option A) or the grant of a piece of land 65.03 sq. metres in area on which to build a three storey house (option B). If option B is chosen, the government also pay an ex gratia building allowance, the current rate of which is $898,000.00 and certain other smaller allowances including $3,800 a month for rent until the house is built. On 25^th May 1999 the husband elected to accept option B although it seems that the election is not irrevocable and it is open to him to choose option A should he change his mind.

7. The Husband resists the Wife's application on a number of grounds. First he says that the consent summons of 3^rd August 1995 was in full and final settlement of all his wife's claims for financial relief. The difficulty with that contention is that nowhere in the order is it stated that the order was in full and final settlement and I note in passing that no order was made dismissing the wife's claim to a lump sum although I am not dealing with that aspect now. I have no doubt that if it had been contended that the order of 3^rd August 1995 had been intended as a clean break in full and final settlement then the order would have said so.

8. Secondly the husband says that the wife has no need of further financial relief. She is he says "an educated businesswoman" and receives $7,000 a month from him for the children. This ignores two matters. Firstly the wife is now unemployed as her mother's small scale knitting factory closed in February 1998. Secondly, I am required by S 7(1)(a) Matrimonial Proceedings and Property Ordinance Cap 192 to have regard to the "income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future."

9. Thirdly the husband says that he has never enjoyed full beneficial ownership of the property in question. He claims that when he was registered as the owner he held it in trust for his parents. That simply does not stand up. There is no trust deed or other document evidencing this. It may well be that he feels morally obliged to house both his parents but that is another matter. The property was originally registered in the name of his father but as we have seen he assigned it as a gift to the husband in 1986. In 1994 the husband transferred the property to his mother. He says that that was at the direction of his father. There seems to be no apparent reason for that transfer but I do note that this was after the parties had separated and whilst divorce proceedings were pending. Finally the property was transferred by the mother to the husband in December 1997. The suggestion is that this was done to ensure that the husband did not lose out when the land was resumed by the government as was then rumoured, because the husband being an indigenous New Territories male resident would be entitled to the full options as mentioned earlier. But the mother on the other hand, would only be entitled to a much smaller amount of compensation. The husband denies this relying on a conversation with the village representative of the village where the house was the effect of which was that the mother would have the full range of options herself. I think that I would need more persuasive evidence than that if I was to accept the husband's argument.

10. Fourthly the husband says that at the time of the decree nisi and making of the consent order he was not the registered owner of any property. That is true; the matrimonial home was on that date registered in the name of the Respondent's mother and I have already noted the questionable transfers of the property that took place around this time. But the wife made no application for any property transfer order in her petition for the reasons I have earlier noted. But what matters is not so much the past position as the present position. Under S 6 Matrimonial Proceedings and Property Ordinance a property transfer order may be made on the grant of a decree nisi or "at any time thereafter" (emphasis supplied). The Wife's application for leave must be considered in the light of the present circumstances.

11. The law is plain and leave ought to be granted where it is apparent that an applicant has or appears to have reasonable prospects of obtaining the relief claimed, or to put it another way has a seriously arguable case - see Chaterjee v. Chaterjee [1976] Fam. 199 which has been followed in Hong Kong - see Lee Wing Tat v. Lee Chan Lo Kai [1983] 1 HKC 522. In order for me to assess the prospects of success I have to consider the factors contained in S 7 Matrimonial Proceedings and Property Ordinance (Cap 192).

12. S 6(1)(a) Matrimonial Proceedings and Property Ordinance empowers the court to

          "order that a party to the marriage shall transfer ..... such property ...... to which the first mentioned party is entitled either in possession or reversion."

13. In my view there can be no doubt that the husband is not entitled (whether in possession or reversion) to any property. The former matrimonial home has been resumed by the government thereby extinguishing the husband's title to it. In her application for leave the wife asks for a transfer order relating to the former matrimonial home or "[the husband's] interest in the land and building he would be erecting in exchange for the resumption of the said former matrimonial home by the government." The husband has elected to receive land on which to build a house but no land has yet been granted to him and so he cannot be said now to be entitled (whether in possession or reversion) to this land. No argument was put forward as to the legal status of the government proposed grant of land, whether it is legally binding or is made on an ex gratia basis. But in either case the proposed grant is not a reversionary interest, such an interest being of course land which reverts to the grantor after the exhaustion of the particular estate (e.g. a lease) which he may have created - see Stroud's Judicial Dictionary 5^th Ed. Vol 4 p.2288.

14. I have not overlooked the definition of property in S 2 Matrimonial Proceedings and Property Ordinance (Cap 192). That is a very wide definition covering any interest in real or personal property or other assets. But a transfer of property order under S 6 that the wife seeks can only relate to the husband's interest in property in possession or reversion. And, as I have found any interest the husband may have in the proposed grant of land by the government is neither a possessory nor a reversionary interest.

15. I must therefore rule that as things now stand the husband has in law no entitlement to any property either in possession or reversion. Therefore the wife has not shown that she has a reasonable prospect of obtaining the relief claimed. In short until the husband is entitled to property (whether in possession or reversion) any application for leave by the wife is premature.

16. I wish only to add that had the husband been entitled to property then I would have found that the wife would have a reasonable prospect of success and I would have granted leave. As it is I have to refuse leave.

17. I make an order nisi that there be no order as to costs and that the wife's costs be taxed under the Legal Aid Regulations.