Ycm v. Lj
Read the full judgment text of FCMC 6812/2016 on BabelCite. This Family Court judgment was delivered on 13 March 2017 before HH Judge C.K. Chan.
Matrimonial Causes – Ancillary Relief – Discovery – Relevance and Necessity – Duty of Full and Frank Disclosure – Form E – Employment History – Property – Bank Accounts – Company Interests – Costs – Wife applied for discovery against husband regarding financial disclosure in Form E – Whether discovery ordered for specific questions regarding husband's financial status – Held: Discovery ordered for employment, property, bank accounts, investments, expenses, health, and new family details with limitations on time periods; Discovery refused for company interests without evidence of beneficial interest, general catch-all disclosure, and confirmation of no other valuable items; Wife awarded half costs of hearing.
Legal issues: Relevance of employment history · Relevance of financial assets and liabilities · Relevance of company interests without evidence · Relevance of general catch-all disclosure · Costs of the hearing
Outcome: Application for discovery granted in part; husband ordered to provide answers/documents for specific questions; costs awarded to wife.
Cites 2 cases
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FCMC 6812/2016 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 6812 OF 2016 ------------------------
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----------------------- D E C I S I O N ------------------------ 1.This is a hearing of the Respondent (“the wife”)’s application for discovery against the Petitioner (“the husband”). Brief introduction 2.The parties were married in 1985. Within wedlock, they have 2 children, both of them have now reached majority and being financially independent. 3.On 3 June 2016, the husband filed a petition for divorce based on 2-year separation. The wife filed an Answer and Cross Petition based on the behaviour of the husband. At the hearing on 5 December 2016, the husband decided not to proceed with his petition for divorce and at the same time indicated that he would not defend the wife’s cross petition. This court then gave directions for the husband’s petition to be stayed and allowed the wife to proceed with her cross petition as undefended. However, I understand that up to this hearing, the wife’s cross petition has yet to be set down in the special procedure list. 4.As for ancillary relief, at the 1st Appointment hearing on 5 December 2016, the wife asked for her draft questionnaire to be answered. The husband objected and therefore, the wife’s request for discovery was adjourned to today for argument. The Law on Discovery in Matrimonial Cases 5.Discovery in matrimonial proceedings is governed by Rule 77(4) of the Matrimonial Causes Rules, Cap.179A (“MCR”) which is as follow:
6.It seems that the Court has a wide discretion in giving directions on discovery but the principles on which the Court is to exercise that discretion are not spelt out in the said rule. 7.In this regard, I think much assistance can be gained by referring to O.24 of the Rules of the High Court, Cap.4A (“RHC”) which governs the issue of discovery. However, I do not intend to go into details of O.24 because I do not think the principles as contained therein are in dispute. The principles governing discovery are relevance and necessity. Orders for production of documents will only be made if the materials sought are relevant to the issues and they are also necessary for the fair disposal of the matter or for saving costs (O.24 r.13, RHC). 8.Parties in matrimonial cases are also under an absolute, positive and continuing duty to give full and frank disclosure of his or her means. In L v C [2007] 3 HKLRD 819, Stock JA (as he then was) confirmed this duty by reciting the following passage in Rayden and Jackson on Divorce and Family Matters (18th ed., 2005) at paragraph 69 at p.855:
9.I do not think the above general principles are in dispute. The wife’s requests Under Part 1.4.1 and 1.4.2 of the husband’s Form E 10.The wife’s 1st Question concerns with Parts 1.4.1 and 1.4.2 of the husband’s Form E in which he stated to be unemployed since 1 July 2015. The wife’s request was:
11.The husband objected by saying that the request was beyond the ambit of Form E. He said he chose to be unemployed because he wanted to retire. He further said it was unnecessary for him to make effort to secure employment because it was his intention to retire. My views 12.I agree with Ms Hung (for the wife) that this question is relevant to the wife’s application for ancillary relief. Of course, the husband can choose whether to work or to retire. It is a matter of personal choice. But what is relevant here is the husband’s earning capacity. He is now aged 57. He was an accountant and used to be employed as the Chief Financial Officer (“CFO”) of a company in the Mainland. Prima facie, he is still at his prime years as far as employment is concerned. Therefore, whether he has made good use of his earning capacity will be relevant when the ancillary relief issue comes to be determined by this court. The wife now wants information on the husband’s last employer and on compensation (if any) being received upon termination is totally understandable and therefore a reasonable request under the circumstances of this case. 13.It is my ruling that the husband has to give a written answer to Question 1. Under Part 2.2 – Interest in landed properties 14.The wife’s 2nd Question concerns with Part 2.2 of the husband’s Form E in which he stated to be the registered owner of a landed property in Singapore:
15.The husband objected by saying that the request is irrelevant. According to him, the only thing relevant was the value of the property and such information has already been given in his Form E. He further said he did not have the documents as requested with him. My views 16.It is my view that the value of the husband’s landed property is of course a relevant issue in the determination of the wife’s ancillary relief application. But equally I think the husband does have a duty to provide further information on that property and that is why there are boxes under Part 2.2 in the Form E for the owner to provide information on matters like down payment, mortgage, other loans and expenses. I am not persuaded that the husband should be exempted from providing that information. 17.I understand that the husband was saying that he did not recall some of the information or did not have the documents as requested. It is hardly a convincing answer. As he is the sole owner of the property, he certainly has the means to obtain those information and documents from the relevant authorities or banks. Therefore, it is my ruling that the husband has a duty to answer or give the documents as requested under Question 2. Under Part 2.3-Bank Accounts 18.The wife’s 3rd Question concerns with the husband’s bank accounts:
19.Again, the husband challenged the relevancy of the Question and the information requested. In respect of Question 3.2 which concerns with the sale of some shares, the husband said they were sold and are therefore no longer in existence. He said that this was the wife’s problem and he was not going to waste any of his valuable time in complying with such request. 20.In respect of Question 3.3 about the bank accounts, he said some of the accounts were not disclosed in Form E. I think what he meant was that since those accounts were not within the requirement for disclosure under Form E, he should not be required to provide further information on them. 21.As to Question 3.4 concerning a fixed deposit of CNY1,800,000 which had matured already in 2016, the husband said the money has been spent by him. My views 22.For Question 3.1, the statements of the bank accounts as disclosed in his Form E must be relevant to the present financial wellbeing of the husband. They need to be produced. But for the disclosure period, I am of the view that the normal period of 12 months (before the filing of the Form E) is sufficient. Therefore, it is my ruling that the husband has to produce the bank statements under Question 3.1 starting from 1 November 2015 up to the date of this Decision. 23.For Question 3.2, the information on the sale of shares was voluntarily disclosed by the husband by writing the same on a customer’s advice from HSBC dated 20 November 2016. Again, whether the husband had or still has company shares and the value of those shares, if any, are all relevant to the present financial wellbeing of the husband and should therefore be disclosed. 24.For Question 3.3, it concerns with certain bank accounts (listed in Annexure A to the Questionnaire) not mentioned in the husband’s Form E. I am satisfied that the husband did at one time hold those bank accounts. They may or may not be in existence as at the date of this hearing but I am satisfied that the husband does have a duty to explain those accounts. If they have already been closed a long time ago, the husband can always say so in his Answers. As to the production of documentary proof, I would again restrict that to the period starting from 1 November 2015 up to today’s hearing. 25.For Question 3.4, the husband said he had already spent the money. Be that as it may, the husband does have a duty to give the information as requested. Under Part 2.4 – Interest in private companies 26.The 4th Question concerns with the husband’s interest in private companies:
27.The husband objected by saying that the wife had no basis to ask this question. He said he used to be an employee of one of the companies. As far as East Asia Properties limited is concerned, he used to be employed as the CFO. As to the other company, he said he had never heard of it. My views 28.I agree with the husband’s submission that there is no evidence to suggest that he has any beneficial interest in the shareholdings of those 2 companies. Without any proper basis, I am not satisfied that this Question needs to be answered. Under Part 2.6 – Business Interests 29.The 5th Question concerns with the husband’s business interests:
30.At the hearing, the husband said he would give an answer to this question and I will say no more on this. Under Part 2.7 – Stocks, Bonds & Other Quoted Securities & Other Investments 31.The 6th Question concerns with the husband’s stocks, bonds and other quoted securities:
32.The husband indicated at the hearing that he would answer the said Question and I shall therefore say no more on this. Under Part 2.8 – Insurance policies 33.The 7th Question concerns with the husband’s insurance policies:
34.The husband objected by questioning why an insurance policy should be regarded as an asset. He further denied that he had the AIA insurance policy. My views 35.An insurance policy may or may not be an asset. That has to depend on whether there is any cash value in those policies. That is why there is a section in the Form E for such disclosure. In the husband’s Form E, I see that he has given very little information on his Manulife insurance policy. He put “N/A” under the column of “Maturity Date”, “Surrender Value” and “Total current value of your interest”. Under these circumstances, I think it is reasonable for the wife to request the husband to provide a policy statement of this policy. 36.As to the AIA insurance policy, I understand from the husband that he does not have this policy or that such policy should have expired years ago. If that is really the case, I am satisfied that the husband should explain the same in a written answer form. Under Part 2.10 – Valuable personal items 37.The 8th Question concerns with the valuable personal items of the husband:
38.According to the husband, he is willing to give an answer in respect of Question 8.1 concerning his car. However, he objected to Question 8.2 because he has already disclosed all his valuable personal items in the Form E. My views 39.As the husband is willing to give an answer to Question 8.1 concerning his car, I shall therefore say no more on that. However, for the other valuable personal items, I tend to agree with the husband’s view that according to him, he has already listed out all his valuable personal belongings in Form E. The wife’s request for further confirmation is therefore unnecessary. Under Part 2.12 – MPF / Pension / Gratuity Interests 40.The 9th Question concerns with the husband’s MPF/Pension/Gratuity Interest:
41.According to the husband, he is now willing to give an answer to this Question and I shall therefore say no more on this. Under Part 2.13 – Liabilities 42.The 10th question concerns with the husband’s liabilities:
43.The husband objected by saying that the information sought were being irrelevant and the wife was trying to interfere with his private life. My views 44.I note that the husband is not saying that he has no credit cards. His credit card information must be relevant or otherwise it would not be required to be disclosed under Part 2 of the Form E. I am of the view that the husband needs to answer this question and to produce the credit card statements as requested. As for the period of disclosure, the usual requirement in Form E is for 3 months before filing. The wife now asks for statements as from June 2016 which is about 6 months before the filing of Form E. In view of the rather uncooperative attitude of the husband in the production of relevant documents, I think a slightly longer period of disclosure is justified. I therefore order the husband to produce the credit card statements as from June 2016 up to the date of this Decision. Under Part 3 – Income 45.The 11th Question concerns with the husband’s income:
46.The husband objected by saying that the information as requested was not relevant. 47.Ms Hung for the wife submitted that the information must be relevant to assess the husband’s present or future earning capacity. However, even Ms Hung herself conceded that the provision of information as from 1985 is too onerous and therefore, she was content to accept information for a period of 5 years before the husband’s retirement. My views 48.I am satisfied that the husband’s employment status must be relevant to his present or future earning capacity. As he has retired in 2015 at the age of 56, it is reasonable for the wife to require further information concerning his past employment. I therefore order the husband to answer this Question but the information or documents to be provided will be restricted to the period starting from 1 July 2012 (ie 3 years before his retirement) to the date of this Decision. I see that Questions 11.2 and 11.3 both concern with the husband’s employment at Hankore from which he left in April 2012, which falls outside the period above ordered. Therefore, I order that the husband needs not answer Questions 11.2 and 11.3. Under Part 4 – Monthly expenses 49.Question 12 concerns with the husband’s monthly expenses:
50.I understand that the husband is now willing to answer this question and I shall therefore say no more on this. Under Part 4.4 – Anticipated future expenses 51.Question 13 concerns with the husband’s anticipated future expenses:
52.The husband objected by saying that he had no further answer to give. My views 53.The husband’s anticipated future expenses will have an important bearing on his future needs, which is a relevant factor in the determination of the ancillary relief application. Therefore, it is my ruling that the husband should give an answer to this question. Other information 54.There are 2 parts in Question 14, one concerning the husband’s health condition and the other about his new family:
55.The husband objected by saying that the Questions are unnecessary and therefore, he would not give any answers to those questions. My views 56.I note that in Part 5.5 of the husband’s Form E, he stated that there were potential medical expenses to treat his heart condition. The husband’s health condition will have important bearings on his future needs and therefore must be a relevant issue, or otherwise, I trust that the husband would not have mentioned this in his Form E. I do not know if the husband has any documents to support the claim on his heart condition, but he has a duty to give an answer to this question. 57.As to the information on his new family and the financial wellbeing of his new partner, it is again a relevant information that will throws light on the overall financial conditions of the husband. I am of the view that he has to answer this question. General 58.Question 15 is a general question asking the husband to disclose whatever relevant information that he has not yet disclosed:
59.The husband objected by saying that all these questions are unnecessary. My views 60.I agree with the views of the husband. In his Form E, he has already said on oath what assets he has and I think it is wrong in principle to assume that he may have hidden some other assets without showing any proper basis for such assumption. If at the end of trial, the husband is found to have lied under oath, he may have incurred criminal liabilities but that is something that needs to be dealt with after the conclusion of the present proceedings. In short, I am not convinced that the husband needs to answer this question. Conclusions 61.Based on the above discussions, these are the conclusions on the wife’s application for discovery:
Costs 62.Costs to follow event. The wife succeeds in some but not all parts of her Questionnaire and I think it is fair for her to have half of the costs of today’s hearing, to be taxed if not agreed. This will be in the form of an order nisi to be made absolute after the expiry of 14 days from the handing down of this Decision.
Representation: The petitioner acting in person Ms Barbara Hung of Messrs Chaine, Chow & Barbara Hung, solicitors for the Respondent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 6812/2016