Lyl Formerly Known As Lly v. Cpl
Read the full judgment text of FCMC 10372/2003 on BabelCite. This Family Court judgment before Deputy District Judge Grace Chan.
Matrimonial Proceedings and Property Ordinance – Order for Sale – Variation – Section 6(1)(e) – Section 6A – Material change of circumstances – Mesher order – Primary order – Ancillary order – Costs – Whether Order for Sale is primary or ancillary order – Whether material change of circumstances exists – Application dismissed – No order as to costs – Wife to provide documentary proof to husband annually
Legal issues: Whether Order for Sale is primary or ancillary order · Whether there is a material change of circumstances warranting variation
Outcome: Application dismissed; Order for Sale remains unvaried.
Cited by 3 cases · Cites 1 case
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FCMC 10372 / 2003 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 10372 OF 2003 ----------------------------
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--------------------------------- JUDGMENT --------------------------------- Introduction 1.The parties of this case were married in 1994. Two children were born within their wedlock. The petitioner (whom I shall still call her the “wife” for convenience) filed her petition for divorce in 2003 on the ground that she had separated from the respondent (whom I shall still address him as the “husband” for easy reference) since 1999. Decree Absolute was granted in late 2004. 2.The custody and ancillary relief matters were settled pursuant to a consent summons made into a consent order by Deputy Judge Kot on 13 October 2004 (“2004 Order”). The said consent summons was drafted by the solicitors of the husband at the material time. 3.This is the application of the husband by way of an amended summons filed on 29 July 2015 to vary paragraph 4 of the 2004 Order in respect of the sale and distribution of sale proceeds of the former matrimonial home (“Order for Sale”), in that he wishes to bring forward the said sale to 6 months from the date of the order to be made. He further proposes that upon the sale and distribution of sale proceeds, he is willing to pay the wife an extra sum of $200,000 as subsidy of her moving costs and future rental expenses. 4.It is his case that the Order for Sale is made pursuant to section 6A of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO” or “Ordinance”) and is thus subject to variation under section 11(2)(da) of the Ordinance. He says that it should be varied on the ground that there is a material change of circumstances which was unforeseen at the material times, more particularly listed as follows:
5.The wife opposes his application and argues in this way. First, she says that the Order for Sale is a property sale order made pursuant to section 6(1)(e) of MPPO, which is not subject to any variation under section 11 of MPPO. Second, the pre-condition for the Order for Sale has not been met (to be elaborated below). Third, the wife does not believe that the husband has any financial difficulty. Her stance is that the former matrimonial home should only be sold when the son completes his university studies and secures a job.[1] 6.In such circumstances, the major issue that call for determination in this trial is this: whether the Order for Sale stated in paragraph 4 of the 2004 Order can, and if so should, be varied by bringing forward the sale of the former matrimonial home. The 2004 Order 7.Paragraph 4 of the 2004 Order provides for the sale and distribution of the former matrimonial home but such sale is to postpone until the triggering events stated therein take place. It reads as follows:
8.Other relevant terms of the 2004 Order include:
9.In addition, the husband has given his undertaking to settle the management fees, rates and government rent of the former matrimonial home (“Undertaking A”) and another undertaking in the exact wording of Paragraph 4 (“Undertaking B”). Pausing here, it is noted that the husband has not applied to discharge either Undertaking in this trial. 10.At the time when the 2004 Order was made, the matrimonial home was registered in the joint names of the parties and free from mortgage. The husband was a skilled workman with the Water Supplies Department. The wife was a housewife. Their children were only 9 and 7 years old. They were living at St Christopher’s Small Group Home due to the unsatisfactory mental mood of the wife allegedly caused by the breakdown of the marriage. 11.For reason(s) unknown to this court, despite that the husband was (and still is) a government servant with steady income, the wife and the children were said to be relying on public assistance at the time of the divorce proceedings.[2] And as a result of the 2004 Order, the husband was only required to pay nominal maintenance to the wife and a token sum of $500 per month for each child. Admittedly, neither party had filed any Form E at the relevant time in 2004. Current situation of the parties/children 12.It is a common ground that both children of the family are over 18 years old and currently living with the wife at the former matrimonial home. The elder daughter is now 21 and has been working since the end of 2013. The younger son is 19 years old and still studying. As at the date of this judgment, he should have taken the Secondary Education Examination (DSE), the result of which will be released this July/August. The husband does not seem to dispute that the son would wish to continue his study to the university, but only if his DSE result so allows. 13.The husband himself is now 54 and still working in the Water Supplies Department, earning about $21,300 per month. He has remarried in 2005. His new wife, now aged 43, is a housewife. They have a son of 8 years old. 14.The wife is now 47. She is working as a waitress with an average monthly income of about $9,000. She has also remarried in 2013, after which her new husband stayed with her in the former matrimonial home. However, he left her in/about August 2015 after physical assault on her. As a result, he was charged for assault occasioning actual bodily harm but offered no evidence, upon agreeing to be bound over for 24 months at the Eastern Magistracy. The wife says she is now contemplating a divorce with this new husband. 15.It is not in dispute that the husband has defaulted paying children maintenance and management fee, rates and government rent of the matrimonial home since/about August 2011. Relevant statutory provisions under MPPO 16.Under MPPO, the court can make an order for transfer, settlement and sale of a property pursuant to section 6. Of relevance to this trial is section 6(1)(e) of MPPO. The relevant part is repeated:
17.Section 6A of the Ordinance states that where the court has made an order under sections 4, 5 and 6, [3] the court can make a further order for the sale of a specified property:
18.The court’s statutory powers to vary or discharge orders for financial provision are contained in section 11 of MPPO. Of particular relevancy here is subsection (2)(da). The provisions are:
19.Simply put, the overall effect of the above 3 sections, in so far as it is relevant to this trial, is this:
Order for Sale: primary or ancillary order? 20.In the course of their opening/closing submission, both parties rely heavily on Yeung Wong Fung Hing (nee Wong Fung Hing) v Yeung Tim Tung [1999] 3 HKLRD 370 in which the Court of Appeal differentiated a property sale order made under section 6(1)(e) and section 6A of MPPO into a primary order and an ancillary order respectively. 21.The facts of Yeung Wong Fung Hing (supra) show that upon trial on the ancillary relief matters, the trial judge ordered the respondent husband to pay the petitioner wife (i) nominal maintenance of $1 per year for her; and (ii) a sum of $3,300 per month for each of the 3 children of the family. Additionally, the trial judge ordered the sale of their matrimonial home (estimated net value was $1.5 million), upon which the petitioner should be paid $1 million out of the sale proceeds, and the balance would go the respondent. Unfortunately, the property market, and thus the value of the property, dropped substantially since the date of the order. The respondent appealed and wanted the distribution of the sale proceeds be substituted by reference to a fraction of the sale proceeds, say 3/5 or 2/3 of the net sale proceeds, to the petitioner. 22.Keith J (as he then was) gave the judgment on behalf of the Court of Appeal (Chan CJHC and Leong JA) and ruled that the court had no power to vary the order in question. His Lordship explained that:
23.Mr Ho for the wife submits that this court should follow Yeung Wong Fung Hing (supra) and rule that the Order for Sale is a primary order made under section 6(1)(e) of MPPO, because it purports to deal with the only family asset of the parties. The order is thus not subject to any variation under section 11 of MPPO. On the other hand, Mr Tam for the husband argues that the primary order made in 2004 is a periodical payment order (of $500 per month per child) made under section 5 of MPPO, and ancillary to it is the Order for Sale to be deferred until the children reach 18 or complete their full time. He thus submits that the Order for Sale is an ancillary order to the primary periodical payment order. Such ancillary order is made under section 6A of MPPO, which can be varied pursuant to section 11 (2)(da) of MPPO. 24.In the premises, it is incumbent for this court to decide if the Order of Sale is a primary or ancillary order. For this purpose, one needs to revisit the wording of section 6A of MPPO (see §17 above). It provides that where the court makes an order under section 4, 5 or 6, the court may make a further order for sale “of such property as may be specified in the order”. Arguably, for section 6A to come into play, a two-tier criteria must be met:
25.However, the periodical payment order in respect of the children of the family contained in the 2004 Order fails to satisfy the second tier of above criteria. It has not specified, directly or indirectly, the former matrimonial home in that periodical payment order. It merely records a very standard clause on the children maintenance which reads as follows:
26.On the other hand, at the end of the trial when giving direction for filing of closing submission, I invited the parties to make submission on Mesher order and its variation. Mr Tam argues in his closing submission that the Order for Sale is not a Mesher order, but merely a “deferred charge mechanism”. I do not agree and will repeat what the learnt authors of Rayden and Jackson on Divorce and Family Matters （18th edition， 2005） Vol. 1 said on a Mesher order at §16.149:
27.The learnt authors of Rayden go on to say that a Mesher order is undoubtedly a property adjustment order made within section 24 of the English Matrimonial Causes Act 1973 (similar to section 6 of MPPO).[4] It is also said that the categorisation of a Mesher order is not always easy. It may be categorised as a property transfer order or a property settlement order etc. Pausing here, it should be noted that neither Mr Ho nor Mr Tam tries to argue in this trial that the Order for Sale is a property settlement order. Both say adamantly that it is a property sale order. Be that as it may, the point is academic, for the same rules as to variation apply, ie any order made under section 6 of MPPO in a divorce is not subject to variation. 28.Due to the reasons set out above, the submission of Mr Tam is erroneous. The Order for Sale is a primary order made under section 6(1)(e) of MPPO and thus it is not subject to variation pursuant to section 11 of the same Ordinance. Procedural nature of section 6A 29.Yet, can it be argued that the Order for Sale can be brought forward under section 6A of MPPO, as the court is empowered to make a further order for sale where the Order for Sale has already been made under section 6(1)(e) of the Ordinance? This, in my view, is closely connected to the nature of section 6A of the Ordinance. In the English Court of Appeal case of Omielan v Omielan [1996] 1 FLR 306 Thorpe LJ discussed the nature and limitation of sections 24A and 31(2)(f) of the Matrimonial Causes Act 1973 (equivalent to sections 6A and 11(2)(da) of MPPO respectively) at 312G-H:
30.As advanced by the husband and concurred by the wife in this trial, the major intention or spirit of postponing the sale of the former matrimonial home is to provide a stable and free accommodation to the children of the family, who were still at a tender age in 2004 but without sufficient periodical payment from the husband. In my view, any application to usurp the above intention or spirit comes nowhere close to “the matters of enforcement, implementation and procedure” of the said order. In fact, it has been held that an application by the spouse out of possession for an early sale would constitute a variation rather than an enforcement or implementation of the order if such application is contrary to the spirit and construction of the order (See: Thompson v Thompson [1986] Fam 38; [1985] FLR at 863). My conclusion 31.Due to the above analysis, I conclude that the Order for Sale in this case is a primary order made pursuant to section 6(1)(e) of MPPO, which is not subject to variation under section 11 of the Ordinance. I also conclude due to the limitation of section 6A of MPPO, being merely procedural in nature, the husband’s proposal for an early sale of the former matrimonial home is contrary to the fundamental spirit of the primary order and thus cannot be regarded as “matters of enforcement, implementation and procedure” of the primary order. In such circumstances, he cannot be allowed to rely on section 6A of MPPO for the purpose of bringing forward the said sale. Should the Order for Sale be varied? 32.Given the above finding, I do not have to consider the 2nd issue of whether the Order of Sale should be varied. However, for the sake of completeness, I would still say a few words on the 2nd issue briefly on the assumption (merely assuming) that the Order for Sale could be varied under the following sub-headings. (i) Limitation of sections 6A and 11 of MPPO 33.As a starting point, one must always bear in mind the fact that section 6A is merely a procedural section and any order made pursuant to that section is an ancillary order, and thus any power/discretion of the court, pursuant to section 11 of MPPO, to revisit that ancillary order must not go beyond the territory of the primary order. I would rely on what I have said at §[29] of this judgment and add the following comment of Thorpe LJ in Omielan v Omielan (supra) as follows (at 312E-F):
34.I shall then move on to the husband’s allegation of material change of unforeseen circumstances since the 2004 Order (see §[4] above). (ii) Expenses of current family and his loans 35.As said, the husband is still working as a government servant earning about $21,300 per month. He has remarried in 2005, less than a year after Decree Absolute was granted. His new wife has born him a son, now aged 8. The husband has stopped paying any maintenance to the children of the family or the management fee and other miscellaneous expenses relating to the former matrimonial home since about August 2011. In his latest Form E, he claims his monthly expenses are $28,603 (including general expenses of $16,900; personal expenses of $2,810; loan repayment of $5,858; his youngest son’s expenses of $3,035). 36.Despite what is said in his updated Form E, it is his oral evidence in the trial that he pays only $8,100 - $8,200 per month to his present wife to cover daily household expenses, her pocket money and the medical expenses of her/their son. Rent (of $7,800 per month) is paid by him. In the circumstances, the general expenses should at least be revised down to not more than $16,000 per month, and the total monthly expenses (excluding loan repayment) down to about $27,703 per month. Prima facie, there is a shortfall of about $6,403 per month. 37.He says that he is running into debts, such as a loan of $250,000 from the HSBC advanced in/about April or May 2014. But of this sum of $250,000, only about $90,000 was spent by him over the last 2 years; a remaining sum of almost $160,000 is still kept at his credit card account, un-utilised. He fails to explain to my satisfaction the necessity of borrowing such a big lump sum of $250,000 from the bank. His attempted explanation that he needed the loan for payment of rental deposit, furniture and electrical appliances of his current rented flat is not accepted, because he started to rent this flat as early as about 2009 or 2010, but not April 2014. 38.The alleged spending of about $90,000 out of the loan of $250,000 within about 2 years comes to an average of about $3,800 per month, which is far less than the shortfall mentioned in §[36] above, which in turn shows that there is a real likelihood of exaggeration of expenses on the part of the husband. In fact, he has to accept during cross examination that he can actually make his ends meet, but for the monthly loan repayment of $5,858 to the bank.[5] 39.Having considered all the evidence, I do not believe that the husband’s financial situation is that bad. My overall impression is that he has no actual necessity to raise a loan; he did so merely to paint a false picture that he is in grave financial situation. It is likely than not that he exaggerates his total monthly expenses. I do not believe that on the whole and in the normal course of events, his income is insufficient to make his ends meet. I accept that there may be occasions when extra and unexpected funds may be required, but he has accepted in the trial that his present wife is able to join the labour market, at least working part time at this stage, in order to help out the family finances. I shall reject to vary the Order for Sale on this ground. (iii) The sister’s debt 40.It is the husband’s case that his elder sister once lent him a sum of $258,000 for the down payment and renovation of the former matrimonial home. According to him, his elder sister is now living at her self-owned flat. She is retiring soon and has chased him for repayment of the loan in the recent years. This alleged debt owed to his sister is disputed by the wife. 41.According to the land search, the former matrimonial home was purchased in the sole name of the husband in 1987 at the consideration of $288,000. A mortgage was taken out with the HSBC for the sum of $259,200 (representing 90% of the purchase price). The mortgage was released 2 years later in February 1999. On the same date of the release, the husband transferred half share of the matrimonial home to the wife so that they became joint tenants. Then came the breakdown of the marriage and the wife filed her petition on 28 August 2003. Two months later, the sister sued the husband in the District Court in 2003 allegedly for dishonoured cheque (dated 19 September 2003) in the sum of $258,000. Default judgment was obtained by the sister, subsequent of that a charging order absolute dated 14 January 2004 was made by the District Court. The said charging order absolute was registered against the former matrimonial home at the land registry on 5 February 2004 and was re-registered on 27 March 2009, after the wife registered the petition on 26 November 2003. 42.The Order for Sale does not make any express reference to the alleged debt of the sister, nor the charging order absolute. It thus becomes a debate between the parties whether the alleged debt is a true debt and if so whether it should be deducted out of the sale proceeds of the matrimonial home before distribution to the parties. However, for reasons which will become clear later in this judgment, there is no need for me to make any concluded finding on the aforesaid debate at this stage. Suffice it is for me to say that even assuming (just assuming) that the sister’s debt is a bona fide debt, the husband has not persuaded me with any concrete and sufficient evidence that there is an unforeseen and material change of circumstances since the 2004 Order, in so far as it relates to the sister’s debt, that warrants a variation of the Order for Sale. The sister debt, according to his own case, is not a recent and new debt which comes into being after the Order for Sale was made; it was already in existence since 1987. Apart from his bare oral assertion that the sister is now chasing him for repayment, he has not called her to give evidence in this trial. He thus fails to discharge his burden of proof and this variation ground must be rejected. (iv) His age and health 43.The husband is now 54. He says that he is suffering from diabetes, high cholesterol and hypertension since 2007. He has degeneration of bones and body pain. He has to take regular medication and attend regular follow up treatment. The retirement age of the government is 60, but he concedes that it may be extended to 65 according to the latest memo of his department. He tells that he is afraid that with his bad health, he might have to retire earlier. His monthly pension will only be $3,000 - $4,000 per month, which is insufficient to support his new family. 44.In my view, the husband has failed to substantiate his bare oral allegation that he might have to retire earlier due to his age and bad health. He has provided a pad of medical records and follow up slips in this trial, but none of them is able to show that his working ability is impeded so that he has to retire early. His own oral evidence does not show the same, either. He has not received any warning letter or negative appraisal report from his senior so far. I refuse to accept his allegation. (v) Other consideration 45.The wife reveals, for the first time, the fact that she has remarried in 2013 only during the trial. Mr Tam suggests in his closing submission that this is another significant change of circumstances that the court should consider. True as it may be that the wife has changes to her marital status, but the wording of the Order for Sale is clear enough to suggest that the time frame for sale is not linked to the remarriage of either party. It thus follows that the remarriage of the wife cannot be a relevant consideration. However, it needs to be pointed out to the wife that she has now remarried. The husband no longer has any further duty to support her, including providing accommodation for her. 46.It is further suggested by Mr Tam that since both parties have grave financial constraint, and in particularly the wife is relying partially on loans, it would serve her better to sell the former matrimonial home early, so that she would receive a large sum of sale proceeds to solve her dire financial problem. This line of argument is, in my view, erroneous and without regard to the fundamental spirit of the Order for Sale which is already repeated on a number of occasions throughout this judgment. 47.Additionally, Mr Tam submits that upon early sale of the former matrimonial home, the court can order the husband to make further maintenance for the elder son, including payment into court, presumably to cover the elder son’s accommodation needs. I only need to point out that this line of submission is not supported by the evidence of the husband (to be elaborated §[49] below. (vi) Actual reason for variation 48.In the trial, the husband is asked why he cannot wait until the son completes his full time education and then sell the matrimonial home. In reply, he explains that he wants to buy a flat to house his new family in order to provide a stable life for his 8-year-old son. It is then pointed out to him that he may make use of his retirement pension to purchase a flat. His lump sum pension is around $873,000, which is exclusive to him and the wife cannot share any portion of it under the 2004 Order. He replies that he wants to solve the problem of not owning his own flat earlier. 49.He is then asked about his proposal to solve the need for a stable accommodation for the elder son before he completes his education. He confesses that he has none, and concedes that he has never thought of this question before he takes out this application. When pressed for an answer, he says, to my surprise, that he is not sure if the elder son is his own blood. I take it that it is merely out of his momentarily folly that he says so. But it becomes clear to me that the underlying reason for his application to bring forward the Order for Sale is for his/his new family’s own benefit, without taking into consideration the spirit of the Order for Sale, ie to provide a free and secured accommodation for the children of the family at least before they complete their education. As such, I would not be hesitant to reject his underlying reason. Conclusion 50.Due to the matters aforesaid, I reject the husband’s case and argument. His application must be dismissed. 51.I have already directed the parties to address me on the costs in their closing submission. Mr Tam for the husband says that since both parties are legally aided, the court should make a no order as to costs, irrespective of the case result. Mr Ho for the wife, however, asks for costs to follow the event. I accept Mr Tam’s submission. Under the circumstances of this case, it would be a waste of further costs and time to let parties who are both legally-aided to embark on the taxation proceedings. Upon due consideration, I exercise my discretion that no order as to costs should be made. 52.The following shall be the order of this court:
Way forward 53.From time to time, the family court would find a Mesher order embodied in a consent application on the ancillary relief matters. This serves as a soft reminder to the practitioner that abundant care should be exercised in the drafting of a Mesher order. Take this case as an example. It has to be accepted by the parties and their legal advisers that the triggering event of the children being “financially capable to move out of the Matrimonial Home” is prone to different interpretation and understanding, and is thus bad drafting. Fortunately, the wife in this trial accepts that the matrimonial home should be sold (though she suggests that it should be sold to the son) when the son completes his education and is able to get a job. 54.Currently, the husband has no contact at all with the wife or the son. In order to ensure that he knows if, and if so when, the son completes his education and starts a job, I direct that the wife is required to provide the husband with a copy of documentary proof by the end of September each year, such as the school fees receipt(s) or student handbook(s) of the son, as well as to inform him in writing once when the son has found a job.
Mr A Ho of Messrs TKC Lawyers (on the instruction of the Director of Legal Aid) for the petitioner (wife) Mr K Tam of Messrs Kent Tam & Co (on the instruction of the Director of Legal Aid) for the respondent (husband) [1] Petitioner’s reply closing submission at §16. [2] See: statement as to arrangement for the children of the family filed by the wife on 28/8/2003. [3] Section 4 of MPPO relates to financial provision for a spouse; section 5 of MPPO relates to financial provision for child of the family. [4] See Rayden and Jackson on Divorce and Family Matters （18th edition， 2005） Vol. 1 at p 16/113 at footnote 1. [5] Day 1of trial (AM session) |
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