LAU YUEN YI v. LEUNG CHI YUNG

HCA 2030/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2030 OF 2008

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BETWEEN

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J U D G M E N T

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Introduction

1.  This is an action by the Plaintiff against the Defendant on a cheque dated 21 August 2007 and drawn by the Defendant on HSBC in favour of the Plaintiff in the sum of $4 million (“the Cheque”) which was dishonoured on presentation for payment.

Background

2.  The Defendant and the Plaintiff were husband and wife before their divorce in 2008.

3.  The Plaintiff was born in 1960 and received secondary education in Hong Kong.  In 1981, she became acquainted with the Defendant.  He was then an air-conditioning technician.

4.  In 1984, the Defendant started operating a small transportation company with a friend in a partnership under the name of On Tat Transportation Company.  They started with two trucks which the partners drove themselves delivering goods for customers.  The partnership terminated in about 1989 and the Defendant carried on with the business as a sole proprietor.

5.  From 1984, the Plaintiff had been helping the Defendant in his business although she had another job of her own as a merchandiser. According to the Plaintiff, she worked long hours every evening in assisting the Defendant in preparing all the invoices for the customers.  She had never received any salary from his business.

6.  The Plaintiff and the Defendant got married in 1987 and their only child, Linda, was born in 1993.  The Plaintiff continued with her daytime job until 1998 when Linda had to attend primary school.  After that, she continued to assist the Defendant in preparing the invoices and the wages payment records for his business.

7.  In 1998, the Plaintiff’s sole proprietorship was incorporated into a company by the name of On Tat Drayage Limited (“the Company”). The shareholders were the Defendant, holding 9999 shares out of 10,000, and the Plaintiff, holding the remaining one share.  They were both directors.

8.  The business of the sole proprietorship and subsequently the Company had obviously prospered.  According to the Plaintiff, she returned to the Company to work full time and she had to prepare over 100 invoices each day.

9.  According to the Plaintiff, she treated the business of the Company as a family business and any profits generated therefrom were enjoyed by the family together.  She therefore did not ask for more shares to be allotted to her nor did she receive any salary for working in the Company.  My understanding of the Defendant’s evidence is that he accepted that that was the position.  This will have a bearing on the issue regarding what is described as the “Five Properties” later.

The Purchases of Properties used as Home

10.  In the meantime, according to the Plaintiff, there were purchases of real properties as described below.

11.  In about 1986, when the Plaintiff and the Defendant were planning to get married, they purchased a flat in Tsuen Tak Gardens in Tsuen Wan (“Tsuen Tak Gardens”) for $248,000.00.  The down payment for that property was made from the profits generated from the partnership business.  The purchase was made in the sole name of the Defendant.  Even though the Plaintiff had made contribution to the household expenses and the mortgage payments, she did not ask to be included as a co-owner.

12.  In mid-1988, Tsuen Tak Gardens was sold for $350,000.00 and a small house in Sai Kung (“the Sai Kung House”) was purchased for $611,000.00 again under the sole name of the Defendant.  The Sai Kung House was financed from profits generated from the sole proprietorship.  The Plaintiff and the Defendant stayed there until mid-1995 when they sold it for $2,250,000.00.

13.  In 1995, they purchased a property in Yuk Yat Gardens in Yuen Long consisting of a 1st Floor, a 2^nd Floor and the Roof (“Yuk Yat Gardens”) for the sum of $2,600,000.00.  The 1^st Floor was registered in the name of the Plaintiff and the 2^nd Floor and Roof was registered under the name of the Defendant.  The mortgage of Yuk Yat Gardens was financed by the profits generated from the Company.  They stayed there until 2005 when it was sold.

14.  In 2004, with a stable income from the Company, they started looking for a more comfortable place as their residence.  They purchased House No. 62 of Seasons Villas in Yuen Long (“the Matrimonial Home”) for $4,370,000.00 in their joint names as joint tenants.  The down payment was from the sale proceeds of Yuk Yat Gardens and the mortgage was financed by the profits generated from the Company.

15.  The Defendant has not challenged the evidence of the Plaintiff relating to the purchases of properties set out above.

16.  Such evidence clearly gives one the picture that, for a period of over 20 years, the Plaintiff and the Defendant were pooling their efforts and resources together in running their transportation business which prospered.  From the profits made from their business, they invested in properties which formed their homes and kept on upgrading themselves.  It did not seem to matter in whose name or names the various properties were purchased.  This again will have a bearing on the said issue regarding the “Five Properties” later.

The Breakup of the Marriage

17.  According to the Plaintiff, in early 2007, the Defendant suddenly said that he wanted to have a divorce because he wished to resume life as a single man.  She was not keen to have a divorce.  Nevertheless, they started to live separately at home, although they still worked together in the office of the Company.  He subsequently moved out of the Matrimonial Home, although the exact stage at which he did that is not clear from the evidence.

18.  In about June 2007, the Plaintiff accidentally discovered from the Defendant’s wallet information about a young Mainland Chinese lady surnamed Wei.  She then understood why the Defendant suddenly wanted a divorce.  In her Witness Statement, she said: -

“My depression and sadness at that time was beyond description. It was so hard to force myself to accept the reality that our marriage had to be ended in such a way. I found that I have no alternative but to go ahead with the divorce and I started to give it a serious thought about my claim for ancillary relief.”

19.  I believe I can understand the feeling of the Plaintiff then.  Any decent wife in those circumstances would have felt the same way.  I have every sympathy for the Plaintiff.

The Chinese Agreement and the Cheque

20.  According to the Plaintiff, the Defendant kept on asking her for a divorce.  He asked her to jot down the details of what she wanted as ancillary relief for his consideration.  After discussions with the Defendant, she typed out a draft Agreement in Chinese (“the Draft Agreement”) on 1 July 2007.

21.  The Draft Agreement read as follows: -

“1) Linda的撫養權歸Eva 擁有。

2) Eva + Linda的生活費: HK$60,000.- 每月5號前轉賬到Eva的戶口內。

A/C 167-3-000103 (H.K. Bank)

3) Linda每年在英國的學費: HK$500,000.- (分____ 次付)。

供到Linda完成大學課程。

4) Eva + Linda在2007年6月前已購下所有的保險費，每年由Philip付責支付。供款期至Eva 65歲為滿供期。

5) 私家車轉為Eva名下，一切停車場月費、供車、牌費、燕梳等，每年期限前一個月由Philip支付。

6) 每4年換一部新車，售額為HK$400,000.- 由Philip支付。

7) 每月Eva的簽賬額為HK$20,000.-

8) 如Linda回港渡假或在香港生活，則簽賬額多加HK$10,000.-

9) 2個物業 + 3個舖的差餉及地租，每季皆由Philip支付。

10) 公司租金HK$17,000.- 支付給劉少珍戶口。

11) 每月月供HK$23,000.- 給劉少珍戶口內，直至2011年4月為止。

12) 四季雅苑物業，均要在簽訂離婚協議書前出售，否則按銀行現時估值用以現金收購Eva的業權。

13) 新居一切的裝修費、傢俬、電器一切由Philip支付。

14) 現金支付給Eva為HK$4,000,000.- 在簽訂離婚協議書前付予給Eva的上述戶口內。

15) 所有律師費及有關費用，一切由Philip支付。

(現時四季雅苑由Eva + Linda居住，僱用工人一名。）

我梁志勇願意接受上述的一切條件，現簽署作為離婚協議。劉婉儀將上述條件委託 _____________ 律師行，待律師行完成正式文件後，再簽約作準。

_________________ 梁志勇

_________________ 劉婉儀

日期：＿＿＿＿＿＿＿＿”

22.  One morning in mid-July 2007, she and the Defendant had breakfast in a restaurant near their office.  She handed over a copy of the Draft Agreement to the Defendant who glanced over it without making any remarks and took it with him.

23.  The Plaintiff further gave evidence to the effect that the Defendant saw her father and two younger brothers on 19 July 2007 at the Matrimonial Home.  The Defendant assured them that if the Plaintiff were to agree to a consent-type divorce, he would leave the Matrimonial Home to her exclusively together with all the items she had listed out in the Draft Agreement.  The Plaintiffs’ father also gave evidence to the same effect.

24.  According to the Defendant, he had never discussed or agreed with the Plaintiff any of the terms stated in the Draft Agreement before the Plaintiff presented it to him sometime in July 2007.  He had never asked her to jot down any details in writing for him to consider.  He also never gave any assurance to the Plaintiff’s father and two younger brothers as she had alleged.

25.  I next deal with what the parties said occurred on 21 August 2007.

26.  According to the Plaintiff, the following was what happened.  She had waited for the Defendant’s response for several weeks but did not hear anything from him.  She tried to call his mobile phone but the calls were all diverted to voicemail.  She could wait no longer and therefore went to the Defendant’s office with her younger brother on 21 August 2007.

27.  In paragraphs 32 – 37 of her Witness Statement, the Plaintiff described what happened as follows: -

“32. To respect my privacy, my brother waited for me outside the office. I went into the Defendant’s private office and asked if he was ready to sign the Chinese Agreement. Totally out of my expectation and without saying a word, the Defendant took out the Chinese Agreement together with a cheque from his drawer and handed them to me right away. I looked at the Chinese Agreement and found that it had already been signed by the Defendant. I further noticed that the cheque payable to me with the word figure imprinted by checkwriter instead of handwriting “THE SUM HK$4,000,000 AND 00CTS”but posted to 21^st November 2007 (the “Cheque”) i.e. 3 months later.

33. I told him that what I asked for is $4 million cash as stated in clause (xiv) of the Chinese Agreement but not a cheque especially not a post-dated cheque. He urged me to accept the Cheque as he needed time to fix his cash flow and reassured me that he would do whatever he could to pay me the $4 million. As I have been dealing with the accounting records of the Company for years, I am confident that the Defendant would have no difficulty in allocating the required cash giving him sufficient time, I then accepted the Cheque.

34. At that junction, I felt so astonished to learn the response of the Defendant. His facial expression indicated to me that he was so eager and released to divorce me at the expense of giving me a lump sum of $4 million as well as consenting to all the terms provided in the Chinese Agreement.

35. A moment later, he asked me back for the Chinese Agreement claiming that he considered that he could not perform clauses (vi) and (ix) contained therein. He took from me the Chinese Agreement and deleted the said clauses saying that he could not guarantee to replace a new car for me every 4 years (per clause (vi)) because that would depend on the Company’s business performance; and that after the divorce, he no longer has any obligation to pay the Government rents and rates of the properties owned by my parents (per clause (ix)). After the deletion, the Defendant handed me back the Chinese Agreement.

36. At the moment when I got hold of the Chinese Agreement, I was really upset by the indifferent attitude of the Defendant, memories of our past relationship came through my mind as it hurt so much that I started crying loudly out of control. I had to force myself to accept the fact that I would have to divorce a man which I had been married to for over 20 years and that the man in front of me showed that he did not care about my feelings at all. He had shown no sense of guilt that he had chosen to end our long marriage for a Mainland girl who is only a little older than our own daughter. Thinking of that, I got so emotional that I hit my handbag on his desk and accused him of abandoning me at my age of 48. He did not even bother to say a word to comfort me. I could not control my emotion and kept crying for a while.

37.      The Defendant then suddenly called up somebody and told the one at the other end of the phone that his wife had gone mad.  He placed the mouthpiece of the phone close to me.  I then took the phone and found out that was his friend Billy Ho whom I also knew.  I told Billy that we were undergoing divorce as the Defendant had chosen to stay with his young girlfriend instead of keeping our long marriage.  Billy, over the phone, expressed his surprise saying that he did not know the situation between us had become so serious.  At that juncture, a staff member, Mr So Kai Tai had entered his office intending to check out what was happening inside.  Realizing it was useless to stay further at the office, I forced myself to control my mood and left the office for home with my brother.”

28.  The Defendant gave a different story.  He was corroborated by a member of the staff of the Company, a Mr So Kai Tai (“Mr So”), who later became a director of the Company.

29.  Their evidence is to the effect that at around noon on 21 August 2007 the Plaintiff arrived at the office of the Company. At that time, both Mr So and another member of the staff, a Mr Yip, were sitting at their desks outside the Defendant’s private office and were speaking to customers on the telephone.  The Plaintiff started shouting and yelling and said that she must be paid money.  She was hitting the office furniture in a violent manner.  She was disturbing the telephone conversations.  After she had gone into the private office of the Defendant, she kept on behaving the same way and said that she would not stop or leave unless she could receive money. She rang up the Accounts Department staff of the Yusen Air & Sea Service Hong Kong Limited (“Yusen”) who was the biggest customer of the Company and requested for the provision of records of transactions between it and the Company.  The Defendant then had to ring Mr Billy Ho in the management of Yusen to ask him to ask his staff to ignore the Plaintiff’s request.

30.  At some stage, the Plaintiff took out a copy of the Draft Agreement and demanded that the Defendant should sign it.  She said that, unless he were to do so, she would continue to disturb and abuse the staff and disturb the customers of the Company.  The Defendant said that the terms of the Draft Agreement were not acceptable and, particularly, that he would not have the ability to pay her $4 million.  This was to no avail.

31.  In the end, the Defendant had no choice but to sign the copy of the Draft Agreement presented to him and also to draw the Cheque, which was post-dated to 21 August 2007, in order to pacify the Plaintiff.

32.  The Defendant then asked Mr So to make a copy each of the Draft Agreement as signed by him and of the Cheque.  The originals were then given to the Plaintiff who then left the office of the Company.

33.  The Defendant specifically denied that it was he who took out the copy of the Draft Agreement already signed by him together with the Cheque already issued by him from his drawer and gave the same to the Plaintiff as alleged.  He also denied that he had asked the Plaintiff to hand back the copy of the Draft Agreement already signed by him for the purpose of deleting clauses (6) and (9) as alleged.

34.  I prefer and accept the evidence of the Defendant and Mr So and do not accept the evidence of the Plaintiff as to what happened for, inter alia, the following reasons : -

(i)   If, according to the allegation of the Plaintiff, the Defendant was really very eager to have a divorce so much so that he already had the Draft Agreement signed and the Cheque drawn, it did not make any sense for him not to go back to the Plaintiff with the same of his own accord much sooner.  Further, it did not make any sense that he should be appearing to try to avoid the Plaintiff by turning off his mobile phone as alleged by her.

(ii)   In any event, it just does not seem probable that the Plaintiff would have had the Draft Agreement signed and the Cheque post-dated and all ready and put in the drawer waiting for the Plaintiff when the Plaintiff had not given him any warning that she would be arriving.  I should note that under cross-examination, the Plaintiff changed her evidence to the effect that, when the Defendant first took out the Cheque, it had not been dated and that he only dated it in front of her.  This certainly does not assist the Plaintiff in her credibility.

(iii)   Furthermore, if the Defendant did have the Draft Agreement signed and the Cheque all ready, it would be highly improbable for him then to have second thoughts and asked for the signed Draft Agreement back for deletion of two clauses.

(iv)   In a situation such as that in the present case, it would have been very natural and probable for the Plaintiff as the innocent wife to have lost her temper and demanded that she should be compensated by the husband who was going to leave her after so many years of living and working together. The Plaintiff in fact admitted that she did lose her temper and control of herself to a certain extent, as can be seen from the paragraphs in her Witness Statement set out in paragraph 27 above and as said by her in the witness box.

35.  I therefore find as a fact that the copy of the Draft Agreement was signed and the Cheque issued by the Defendant in order to pacify the Plaintiff and to stop her from interfering with the staff and customers of the Company.  In other words, the same were the result of duress exercised by the Plaintiff.

36.  Such finding, however, is not the main deciding factor in this case.

The Reconciliation

37.  According to the Defendant, he and the Plaintiff reconciled with each other in October 2007.  Having left the Matrimonial Home sometime earlier, he moved back there to live with the Plaintiff.  The Plaintiff also went back to work in the Company.  Before the Chinese New Year in February 2008, the Plaintiff suggested that the Company should give its staff a treat by taking them on holiday in Taiwan.  During that time, the Plaintiff and the Defendant stayed in the same hotel room.

38.  Further, according to the Defendant, because of the reconciliation and his belief that the Draft Agreement as signed by him and the Cheque were not legally binding or enforceable, he asked the Plaintiff before 21 November 2007, the date of the Cheque, to return the Cheque to him. The Plaintiff told him that she had already destroyed the Cheque by tearing it up and that the Draft Agreement as signed by the Defendant was useless.  The Defendant believed her.  They therefore agreed that the same was terminated and cancelled.

39.  The Plaintiff on the other hand denied that there was any reconciliation.  She said that shortly after 21 August 2007, she left Hong Kong to take Linda to school in England.  Upon returning to Hong Kong in mid-September 2007, she was determined to proceed with the divorce without delay.  She was introduced by someone to a firm of solicitors, Messrs Charles Ho & Co (“CHC”).  Her case was assigned to be taken care of by a Mr Fung who the Plaintiff thought to be a solicitor and who turned out to be a legal clerk in CHC in fact.  More about this later.

40.  She said that during that period of time the Defendant called her up and requested her urgently to defer the divorce proceedings as he had to deal with some litigation regarding violation of the traffic law.  She was told by the Defendant that he was staying in a serviced apartment and paying $10,000 a month as rental.  In order to save money to deal with the said litigation, he urged her to let him move back to the Matrimonial Home for a short period in order to ease his financial burden.  She agreed as long as they were to occupy separate bedrooms.

41.  Further, he requested her to defer the presentation of the Cheque until January 2008 because the Company at that time was in great need of cash.  He also asked her to go back to the office to assist him in preparing the Company’s accounts for tax reporting purpose.  As the Defendant looked very depressed and bearing in mind their long marriage and their harmonious relationship in the past, she agreed to defer the divorce petition as well as the presentation of the Cheque.

42.  She then resumed work in the Company from October 2007.  She said that it was the Defendant who asked her to organise the staff trip to Taiwan.  She agreed to share the hotel room with the Defendant because she did not want the staff to know that their marriage had broken up.

43.  Mr So gave evidence to the effect that in about September 2007 the Plaintiff rang him and inquired about the Defendant. She told him that she did not want to divorce and intended to be reconciled with the Defendant.  She called him again in October 2007 and said that she wished to go back to work in the Company.  Mr So being in charge of the Company in the absence of the Defendant, who was then away, agreed to her returning. She duly did return.  He said that the Plaintiff and the Defendant did appear to have reconciled and also that it was the Plaintiff’s idea to take the staff to Taiwan.  He said that they appeared to be a sweet loving couple during the trip to Taiwan.

44.  I accept the evidence of the Defendant and Mr So that there was a reconciliation between the Plaintiff and the Defendant.  I do not accept the Plaintiff’s evidence in this regard.

45.  The fact that the Defendant moved back to the Matrimonial Home, that the Plaintiff went back to work in the Company, that they shared the same hotel room in Taiwan and, in particular, the photographs taken of them as a couple in Taiwan showing them to be a happy and loving couple leave me with no doubt that there was indeed a reconciliation between the Plaintiff and the Defendant during the period between about October 2007 – February 2008.  I further do not accept the Plaintiff’s explanation that the reason why she agreed to share the same hotel room with the Defendant in Taiwan was that she did not want the staff to know that their marriage had broken up. It seems from paragraph 37 of her Witness Statement set out in paragraph 27 above that she was quite ready to inform Billy Ho of Yusen about her marriage problem: “I then took the phone and found out that was his friend Billy Ho whom I also knew.  I told Billy that we were undergoing divorce as the Defendant had chosen to stay with his younger girlfriend instead of keeping our long marriage”.

The Presentation of the Cheque for Payment

46.  Although the Cheque was dated 21 November 2007, the Plaintiff did not present it for payment on that date or soon thereafter.  Instead, she only paid it into her own bank account on 20 May 2008.  This was the last day of the validity of the Cheque.

47.  It was only on 29 September 2008 that the solicitors now acting for the Plaintiff, Messrs May Cheng & Co., wrote a letter to the Defendant complaining about the dishonour of the Cheque and demanded payment of the same to the Plaintiff.

48.  In cross-examination by Mr Nip, Counsel for the Defendant, the Plaintiff was asked why she did not pay in the Cheque in November 2007.  She said that the reason was that the Defendant kept on requesting her to delay paying in the Cheque and that she also knew he was in financial trouble.  She further said that she was not in a hurry to divorce him.  She denied that the reason for her not paying in the Cheque in November 2007 was that there was a reconciliation.  When she was questioned about the expressions of her and the Defendant in the photographs taken in Taiwan, she admitted that he treated her very well for those two days and that it did make her think whether they should be reconciled.  She revealed, however, that he actually still had “the Mainland woman” because she discovered that he was still liaising with that woman by telephone.  She admitted that their “better relationship” in Taiwan turned bad again after they returned to Hong Kong because of the other woman.

49.  I find as a fact that the main reason why the Plaintiff did not pay in the Cheque on 21 November 2007 or soon thereafter was that there was a reconciliation as alleged by the Defendant.  I might also add that the Plaintiff appeared to have changed her evidence a few times regarding whether she was or was not in a hurry to have a divorce, depending on whether it suited particular parts of her story.

The Divorce Process

50.  The trip to Taiwan was in early February 2008.

51.  By a letter dated 23 February 2008, CHC wrote on behalf of the Plaintiff to the Defendant regarding the Plaintiff’s intention to present a divorce petition.  The letter went on to say:  “We are instructed that you have no objections in dissolving the marriage and the matters of custody and ancillary relief be disposed of as follows: - ”. It then went on to set out the terms.  It also enclosed therewith a draft Minutes of Consent Order incorporating the said terms for the Defendant’s approval (“the 1^st Draft Minutes”).

52.  The second recital of the 1^st Draft Minutes read as follows : -

“AND UPON the Petitioner and the Respondent agreeing and acknowledging that the provisions referred to herein are accepted in full and final settlement of all claims that the Petitioner and the Respondent may have against each other for lump sum and property transfer order including claims under the Matrimonial Causes Ordinance, the Matrimonial Proceedings and Property Ordinance, the Married Persons Status Ordinance, Marriage and Child (Miscellaneous Amendments) Ordinance and all other relevant ordinances.” (emphasis added)

53.  By and large, the terms contained in the 1^st Draft Minutes seemed to have been modelled on the terms set out in the Draft Agreement and there were not any big differences between the two.  By far, the most important term of agreement and cross-undertaking between the Plaintiff and the Defendant contained in the 1^st Draft Minutes was to the effect that the Matrimonial Home would be put up for sale at not less than $5,500,000.00 and the proceeds would be divided equally between them.

54.  There were obviously further negotiations between the Plaintiff and the Defendant.  I shall refer to below a meeting between the Plaintiff, the Defendant and a Ms Ma Yuen Ming (“Ms Ma”) which took place on 24th March 2008 when I come to deal with the “Five Properties”.

55.  Subsequently, there was another letter dated 3 April 2008 from CHC to the Defendant enclosing their amended draft Minutes of Consent Order (“the 2^nd Draft Minutes”) for his approval.

56.  There were some differences between the terms contained in the 2^nd Draft Minutes and those contained in the 1^st Draft Minutes.  By far the most important change was in the arrangement about the Matrimonial Home.

57.  Thus, the 2^nd Draft Minutes set out the agreement and cross-undertakings between the Plaintiff as Petitioner and the Defendant as Respondent the gist of which were as follows: -

(i)   The Plaintiff would at the date of the Decree Absolute or when the Plaintiff moved out of the Matrimonial Home at nil consideration transfer all her title rights and interest therein to the Defendant so that he would become the sole legal and beneficial owner of it.

(ii)   The Defendant would continue to pay the premium of two AIA insurance policies for Linda until she reached the age of 25 years and subject to a maximum of $42,000.00 per annum in total (instead of 6 policies for the benefit of both the Plaintiff and Linda under the 1^st Draft Minutes).

(iii)  The Defendant would pay removal expenses to the Plaintiff in the sum of $150,000.00.

(iv)  The Defendant would repay a loan owed by him to the Plaintiff’s mother in the sum of $700,000.00 in one lump sum (instead of by monthly instalments of $23,000.00 each under the 1^st Draft Minutes).

(v)   The Defendant would pay for 4 economy class air tickets between Hong Kong and Britain for Linda each year until she completed her full-time education (which was not in the 1^st Draft Minutes).

(vi)  The Defendant would pay maintenance pending suit in respect of Linda in the sum of $30,000.00 per month and in respect of the Plaintiff in the sum of $45,000.00 per month until the granting of the Decree Nisi (which together with those provisions referred to in paragraph 58 (ii) and (iii) below were slightly different from those under the 1^st Draft Minutes).

58.  The 2^nd Draft Minutes then went on to order in gist as follows: -

(i)   The Plaintiff be granted custody of Linda with reasonable access to the Defendant.

(ii)   The Defendant should pay maintenance to the Plaintiff for herself at the rate of $13,000.00 per month from the date of the Decree Nisi during their joint lives until the Plaintiff should remarry, whichever should occur earlier.

(iii)  The Defendant should pay maintenance to the Plaintiff for Linda at the rate of $45,000.00 per month until Linda should attain the age of 18 years or cease full-time education, whichever should occur later.

59.  It can thus be seen from a comparison between the 1^st Draft Minutes and the 2^nd Draft Minutes that the major difference between them is that, instead of the Matrimonial Home being sold and the proceeds shared between the Plaintiff and the Defendant, the same would now be given to the Defendant solely at no consideration.

60.  By a letter dated 11 April 2008, the solicitors for the Defendant wrote to CHC enclosing the Defendant’s suggested amendments marked on the 2^nd Draft Minutes for the Plaintiff’s consideration.  Some of the suggested amendments were accepted but others were not.

61.  Eventually, on 14 May 2008, the parties and their respective solicitors signed on the finalised version of the Minutes of Consent Order (“the Minutes of Consent Order”) which were substantially based on the 2^nd Draft Minutes.

62.  The terms of the Minutes of Consent Order as signed by the parties and their respective solicitors were eventually very substantially incorporated into an Order (By Consent) made by Her Honour Judge Chu on 28th July 2008 in the divorce proceedings under action under FCMC 5468/2008 (“the Order By Consent”).

63.  The Decree Nisi was also made by Judge Chu on 28 July 2008.

64.  By a letter dated 21 August 2008, the clerk to Judge Chu wrote to CHC and said that the learned Judge suggested that there should be a minor clerical amendment to the Order by Consent.  The same was subsequently amended accordingly resulting in an Amended Order which came into existence on 27 November 2008 (“the Amended Order”).  It would appear from the backsheet of the Amended Order that at that stage, namely, 27 November 2008, the Plaintiff had already changed her solicitors from CHC to Messrs May Cheng & Co. on the record of the Court.

65.  In the meantime, on 18 September 2008, the Decree Nisi was made Absolute and the marriage was formally dissolved.

66.  On 17 March 2009, by the Order of Deputy Judge Kot, the Divorce Petition was amended just for the purpose of amending the name of the Respondent (the Defendant) to read “Leung Chi Yung Philip”.  On the same date, the Decree Nisi was amended and the Amended Order was re-amended accordingly for the same purpose.

The Parties’ Respective Cases

67.  The Defendant’s defence is quite simple.  He says that the Draft Agreement which he signed on 21 August 2007 was never binding on and enforceable against him.  Accordingly, he is not liable on the Cheque which was drawn pursuant thereto in favour of the Plaintiff.  In any event, whatever liability he had under the Draft Agreement signed by him and the Cheque had been terminated and replaced by his obligations under the Consent Order which incorporated the terms of the Minutes of Consent Order agreed between him and the Plaintiff “in full and final settlement” of all claims between them.

68.  The Plaintiff’s case is that she and the Defendant agreed to have a divorce in mid-February 2008.  The Defendant told her that if she were to mention the $4 million in the proposed consent order, he would ignore the petition and not sign anything.  As she did not want to delay the divorce any longer, she agreed not to mention the same.  She also informed Mr Fung of CHC about this and Mr Fung advised her that, if he did not pay her the $4 million later, she could sue him.  Mr Fung did not advise her to do anything else to protect her own interest.

69.  After the 23 February 2008 letter by CHC had been received by the Defendant, he said that he would not sell the Matrimonial Home and share the proceeds with her but would only give her the $4 million later.  He threatened that, if the Plaintiff were to reject his request, he would simply close down the Company and she would get nothing from him.  He also threatened to stop supporting Linda in her education.

70.  In such circumstances, the Plaintiff had no choice but to agree to Defendant’s proposal about the Matrimonial Home and the non-mention of the $4 million in the terms of the divorce.  At no time did she agree or acknowledge that the Draft Agreement as signed by the Defendant and the Cheque had become null and void.

71.  After the dishonour of the Cheque which was paid in on 20 May 2008 (6 days after the parties had signed the Minutes of Consent Order), the Plaintiff immediately told Mr Fung of CHC about the dishonour.  Mr Fung told her that the Minutes of Consent Order and the petition documents had already been filed in court on 14 May 2008 and could not be retrieved and that, once the divorce proceedings had commenced, they could not be stopped.  Mr Fung said however that she could sue the Defendant on the dishonoured cheque.  She therefore did not do anything to seek leave from the court to amend the Minutes of Consent Order to protect herself about the $4 million.

72.  The Defendant explained that the reason why the Plaintiff agreed to give up her interest in the Matrimonial Home was that the Defendant agreed to give up his claim to the beneficial interest in the “Five Properties” to be described below which had been purchased in the names of the Plaintiff’s parents with money provided by him.

73.  The Plaintiff on the other hand said that the “Five Properties” had been purchased with money belonging to her parents and with some contribution from herself and her siblings in respect of one of them.

74.  I shall deal with the “Five Properties” below.

The “Five Properties”

75.  The “Five Properties” are as follows : -

(i)   Unit 20D, Block 1, San Yuen Long Centre, in Yuen Long (“SYLC”) purchased in November 1996 in the sole name of the Plaintiff’s father, Lau Chiu Wah (“the Father”), for $1,860,000.00 with no mortgage.

(ii)   Unit 7, Ground Floor, Cheong Ning Building, in Tsuen Wan (“Unit 7”) purchased in September 2004 in the sole name of the Plaintiff’s mother, Lau Siu Chen (“the Mother”), for $400,000.00 with no mortgage.

(iii)  Unit 8, Ground Floor, Cheong Ning Building aforesaid (“Unit 8”) purchased in September 2004 in the sole name of the Mother for $460,000.00 with no mortgage.

(iv)  Unit 9, Ground Floor, Cheong Ning Building aforesaid (“Unit 9”) purchased in September 2004 in the sole name of the Mother for $500,000.00 with no mortgage.

(v)   Flat F, 6^th Floor, Tower 3, Vianni Cove in Yuen Long (“6F Vianni Cove”) purchased  in September 2006 in the sole name of the Mother for $1,623,000.00 with no mortgage.  This property was sold in September 2009, well after the divorce, for $2,010,000.00.

76.  According to the Plaintiff and her parents who all gave evidence, the Five Properties were purchased mainly with money saved by the parents which at the time of the divorce in 2008 were together worth about $6 million.

77.  The Mother is now aged 70 odd years.  She said she started working as a lift operator at the age of 18 years and married at the age of 22 years.  Later, she also earned some money by doing handicraft producing plastic flowers.  Eventually she helped to take care of the Plaintiff’s daughter and some other people’s children.  She earned about $6,000.00 per month between 1980’s and 1993.  She said that her husband who had been working as a restaurant manager and living in staff quarters used to give her $300.00 - $400.00 per month but later gave more.  She also said she invested in gold cubes and foreign exchange throughout the years and made profits.  She even invested in shares which she traded through her husband.  There is almost a complete lack of documentary and oral evidence about details of investments allegedly made by her throughout the years.  What is more, she seemed to have the habit of keeping a lot of her money in cash in her safe deposit box.  The Plaintiff also gave evidence to the effect that she would help to withdraw cash sums of $10,000.00 each regularly from the Mother’s accounts by using the Mother’s ATM card and handing the same over to her to be put in her safe deposit box.  The Plaintiff gave the reason that her mother did that because she did not wish the Father to know about her financial position.  Such an explanation does not sit well with the evidence by the Mother that she traded in shares through the Father.  Furthermore, no reason has been offered as to why the Mother had to be secretive about her assets vis-à-vis the Father.  All in all, my assessment of the Mother is that she is a very simple lady who does not know much about investments.

78.  Looking at all the evidence, I simply do not accept the allegation by the Plaintiff and her parents that the Five Properties were purchased in cash with money saved by the parents, especially the Mother, together with a small contribution from the Plaintiff and her siblings regarding SYLC.  The scanty evidence of the bank accounts of the Mother does not satisfy me at all as to where the cash had come from.  I find the evidence that even a sum of over $1.4 million which went towards the purchase price of 6F Vianni Cove had been taken out in cash from the Mother’s safe deposit box as being money saved by her to be incredible.

79.  Unit 7, Unit 8 and Unit 9 have in fact been let by the Mother to the Company to be used as its office since purchase.

80.  According to the Defendant, the Five Properties had been purchased with money provided by him.  He said that, because he and his wife were in the transportation business and anything could happen to them, they could not let other people know they owned property.  Hence, the Five Properties were purchased in the name of the Father or the Mother with the understanding that the same would be held on trust and that, if they were to die, the same would be transferred back to him.  In the witness box, he also said that, if there was no divorce, they would be held in trust for both he and the Plaintiff, but that, if there was a divorce, they would be held for the Plaintiff.  This seems to be against his own case originally put forward.

81.  The evidence of the Defendant on the sources of the alleged funds for the purchase of the Five Properties is equally unsatisfactory.  He was unable to produce any bank account or financial statement showing that he had the money to pay for the purchase of the properties.  He only said that there was money in the Company which could be shifted around.

82.  It is to be noted that there is no evidence that the Father or the Mother had made any Declaration of Trust of any of the Five Properties in favour of the Defendant.  There is also no evidence of any will made by either of them which would give any of the Five Properties to the Defendant after their respective deaths.

83.  Having considered all the evidence, I am of the view that neither side has told me the truth.  I suspect that the major source of the money for the purchase of the Five Properties was cash generated from the business of the Company.  I do not wish to speculate on the true reason why the parties did this, although I have my own suspicions.  If the previous mode of acquisition of the properties used as the homes for the Plaintiff and the Defendant as described in paragraphs 10 – 16 above is anything to go by, then it may be that both the Plaintiff and the Defendant or the Company may claim to have a beneficial interest in the Five Properties.  I also refer to what I have said in paragraph 9 above.

84.  It is rather unsatisfactory that I am only able to express my view about the Five Properties as set out in paragraph 83 above instead of being more precise in my findings.  Fortunately, I think that the case can be decided on a much more straightforward ground.

The Meeting on 24 March 2008

85.  At this juncture, I have to deal with the meeting which as accepted by all parties took place between the Plaintiff, the Defendant and Ms Ma on 24 March 2008, i.e., between the dates of the 1^st Draft Minutes and the 2^nd Draft Minutes.

86.  Ms Ma has known the Defendant for very many years and, after the Defendant had become acquainted with the Plaintiff, has also got to know the Plaintiff very well.  She is a fung shui master and has been treated by the Plaintiff and the Defendant as a kind of spiritual adviser.  She would help them to organise their spiritual worships (拜神) during festivities.

87.  According to Ms Ma, in the evening on 24 March 2008, she met with the Plaintiff who drove her to see the Defendant at his office.  The three of them talked about the divorce settlement.  She recalled that the Plaintiff agreed to move out of the Matrimonial Home and to transfer her half share of the same to the Defendant at no consideration in exchange for the full beneficial ownership of five properties registered under her parents’ names which the Defendant had paid for over the years and on condition that the Defendant would continuing paying rent for the office and paying maintenance for the Plaintiff and supporting Linda.  The Defendant raised the subject of the Draft Agreement and the Cheque.  The Plaintiff confirmed that the Draft Agreement was no more and that she had already destroyed the Cheque.  She then still suggested that Plaintiff should return the Cheque and the Draft Agreement to the Defendant.  The Defendant said that it was not necessary because they had been married a number of years and he believed her.  Ms Ma said that the parties were negotiating by reference to the 1^st Draft Minutes and not the Draft Agreement.  The Plaintiff later drove her back home in Sai Kung.  They had a long discussion and she expressed her opinion to the Plaintiff that she had done well under the divorce settlement and should be satisfied.

88.  The Defendant’s evidence corroborates Ms Ma’s evidence.

89.  The Plaintiff’s evidence is to the effect that in front of Ms Ma she and the Defendant never discussed anything about the “Five Properties” and that she agreed not to include the Cheque in the Minutes of Consent Order.

90.  I find Ms Ma to be a straightforward, spontaneous and honest witness.  Her evidence of what happened is certainly more credible than that of the Defendant, especially in light of the 1^st Draft Minutes and the 2^nd Draft Minutes.  I accept the evidence of the Defendant and Ms Ma and reject of the Plaintiff on this aspect.

My Findings

91.  In my judgment, the divorce proceedings culminating in the Order By Consent made by Judge Chu on 28 July 2008 which was based on the Minutes of Consent Order signed between the parties is decisive of the matter.  The agreement between the Plaintiff and the Defendant that the terms contained in the Minutes of Consent Order were “in full and final settlement” of all claims between them regarding ancillary relief and custody of the child is already conclusive of the matter.  The Cheque of course had come into existence in the course of the negotiations between the parties regarding ancillary relief prior to the signing of the Minutes of Consent Order and would have been superseded by the latter which represent the parties’ final agreement regarding ancillary relief.

92.  I do not accept the evidence of the Plaintiff to the effect that the Defendant had promised her that he would pay her the $4 million on the Cheque on condition that she agreed not to mention it as one of the divorce terms.  The reasons are as follows: -

(i)   If the Plaintiff had really informed CHC of such an agreement, they would no doubt have advised her that she must insist on having something in writing to protect herself, e.g., a note of acknowledgment by the Defendant or a letter between the parties’ solicitors confirming such an agreement.  There was none.

(ii)   If the Plaintiff were to insist that nothing should be in writing to protect herself, any solicitor would have asked the Plaintiff to acknowledge that such was indeed her instruction so as to protect himself.  There was no such acknowledgment signed by the Plaintiff in favour of CHC.

(iii)  There were so many opportunities since 20 May 2008 for the Plaintiff to raise the matter with the Family Court about the sum of $4 million allegedly owed to her by the Defendant, yet she did not raise it even up to the stage of the final amendment of the court documents on 17 March 2009.  This was despite the fact that by a letter dated 29 September 2008 from the solicitors now acting for the Plaintiff (who by then had already come onto the scene in place of CHC) had given notice of dishonour of the Cheque to and demanded payment of the sum of $4 million from the Defendant.

(iv)  Furthermore, in the letter dated 9 October 2008 by the Plaintiff’s present solicitors to the Defendant’s solicitors, the demand for payment of the sum of $4 million was on the basis of the Draft Agreement as signed by the Defendant and not on the basis as now put forward by the Plaintiff, namely, that the Defendant had promised to pay her $4 million later on condition that she agreed not to mention it in the terms of the divorce.

(v)   As already said above, I accept the evidence of the Defendant and Ms Ma regarding what happened at the meeting on 24 March 2008.

Other Issues

93.  There were other issues raised during the trial, e.g., the purchase of another property, i.e., Unit 3D Vianni Cove, in the sole name of the Defendant which is alleged by him to be an act to assist his friend, a Mr Wong Kwan Joe. I do not think that such issues are relevant to the central issues between the parties.  I will not add to the length of this Judgment by dealing with them.

Conclusions

94.  In the result, I have no alternative but to dismiss the Plaintiff’s claim.  I make an order nisi that the Plaintiff should pay to the Defendant the costs of this action.

95.  It remains for me to thank Counsel on both sides for their able assistance rendered to me.