Erwiana Sulistyaningsih v. Tsui Yun Bun Barry and Another

HCA 2256/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2256 OF 2015

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Before: Mr Recorder Stewart Wong SC in Court

Dates of Hearing: 15 and 23 November 2017

Date of Judgment: 28 December 2017

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JUDGMENT

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A. CRIMINAL AND CIVIL PROCEEDINGS AGAINST THE 2^ND DEFENDANT

1.The plaintiff is an Indonesian national.

2.The defendants were at all material times a married couple.  They were married on 22 July 1995.[1]

3.The plaintiff was employed by the 2^nd defendant as a foreign domestic helper as from 30 May 2013 to 9 January 2014. 

4.Under the contract of employment dated 22 March 2013, the plaintiff was to work and reside at Flat J, 38/F, Block 5, Beverly Garden, 1 Tong Ming Street, Tseung Kwan O (“the Property”), which was the residence of the 2^nd defendant and her two children.  Even though the employment contract stated that the plaintiff was to take care of two adultsand two minors, it appears that the 1^st defendant did not reside there.  The plaintiff does not suggest that he did.

5.The plaintiff alleges that, during her employment, she was subjected to continuous serious mistreatment by the 2^nd defendant, with theresult that the 2^nd defendant was charged with a number of offences against the person committed against the plaintiff.  She was tried in the District Court for 16 days between 8 December 2014 and 20 January 2015 before HH Judge Woodcock.  Verdict was delivered on 10 February 2015, and she was convicted of those offences, whereupon she was remanded in custody pending sentence.  She was sentenced to six years’ imprisonment and a fine of HK$15,000 on 27 February 2015.

6.On 16 March 2015, the plaintiff issued a writ in the District Court, together with a statement of claim and a statement of damages, in DCPI 569/2015, against the 2^nd defendant, claiming damages for assault and battery, false imprisonment, negligence, breach of duty of care, breach of contract and breach of the Employment Ordinance (Cap 57).  In the statement of damages, a total of HK$816,249.03 plus interest was claimedunder the tortuous claims.[2]  Those documents were sent to the 2^nd defendantat the Lo Wu Correctional Institution, where the 2^nd defendant was incarcerated, by registered post on 17 March 2015. 

7.On 28 April 2015, an interlocutory judgment (“the Judgment”), with damages to be assessed, was entered in favour of the plaintiff against the 2^nd defendant as the latter did not file an acknowledgment of service.  A copy of the Judgment was sent to the 2^nd defendant by registered post onthe same day.  Even though, by a letter dated 22 May 2015, solicitors then acting for the 2^nd defendant informed the solicitors acting for the plaintiff that they had instructions to apply to set aside the Judgment, no steps have been taken to effect that.  She is now acting in person in DCPI 569/2015.  The assessment of damages took place on 4 December 2017 before HH Judge Winnie Tsui.  Judgment was handed down on 21 December 2017 with damages assessed at HK$809,430.03 plus interest and costs.

B.   THE PROPERTY

8.The Property was purchased by the defendants as joint tenants from the Housing Authority (“the HA”) under the Home Ownership Scheme (“the HOS”) on 4 December 1998.  As from that date, they had been the joint registered owners of the Property.  Any transfer of ownership would require the HA’s consent. 

9.The purchase was financed by a loan from Hang Seng Finance Limited.  In the Legal Charge dated 4 December 1998, the defendants were collectively “the Borrower”, and they “as Beneficial Owner” charged the Property to the lender as security.  This was replaced by a loan from Dao Heng Bank, and in the Legal Charge dated 1 December 1999, the defendants were collectively “the Borrower”, and they “as Beneficial Owner” charged the Property to the lender as security.

10.In a Deed of Separation (“the Deed”) dated 6 February 2015 made between the defendants, it was stated that:

(1) The Property was the matrimonial home.

(2) The defendants last cohabited at the Property.

(3) There are two children, a son (born in 1996) and a daughter (born in 1998).

(4) The defendants were minded to have a separation.

(5) “ The Husband and the Wife having lived separately for years will adopt 6^th day February 2015 as the date of separation for any legal proceedings, and the Wife shall move out of the matrimonial home on the same date.”

(6) “ At the costs and expenses of the Husband, the Wife shall unconditionally transfer all her share in and interest of, if any, in the matrimonial home to the Husband absolutely, but the Husband shall not sell the matrimonial home without the written consent from the son.”

(7) “ The Husband hereby undertakes not to create any further incumbrance to the matrimonial home without the written consent of the son.”

(8) “ The Husband shall pay the Wife maintenance at the rate as agreed between them from time to time until further agreement or order of the court.”

11.By an application dated 18 February 2015, the defendants applied to the HA for consent for the transfer of the Property from their joint names to the 1^st defendant’s sole name (“the Transfer”).  The reason for the transfer was said to be “Transfer to spouse owing to separation”.  It appears from a letter dated 8 April 2015 from the HA that the application was only received by it on 24 March 2015.  The HA consented by letter dated 30 April 2015, subject inter alia to the condition that the transfer was to be at nil monetary consideration.   

12.Notwithstanding the provision in the Deed that the Transfer was to be unconditional, and a condition of consent by the HA was that the Transfer was to be at nil consideration, in a draft assignment submitted to the HA, it was provided that the Transfer was to be made at a consideration of HK$1,251,300.  This provision was deleted by the HA by letter dated 25 June 2015.

13.The Transfer was made by way of an Assignment dated 17 July 2015 (“the Assignment”) at nil consideration.   

14.On the Deed, the 1^st defendant gave his address as Flat C, 28/F, Tower 2, Central Park, Hoi Ting Road in Tai Kok Tsui (“the TKT Address”), while the 2^nd defendant gave the Property as her address.  On the Assignment, both the defendants, who assigned “as beneficial owner”of the Property to the 1^st defendant absolutely, gave the TKT Address as their addresses (even though the 2^nd defendant was actually in prison at the time).

15.The matters stated in Sections A and B are not in dispute, and/or are supported by documents, and I find them as facts.

C.   THE PLEADINGS

16.The plaintiff now applies to set aside the Transfer under section 60 of the Conveyancing and Property Ordinance (Cap 219) (“C&PO”).  She alleges in her Statement of Claim that:

(1) The 2^nd defendant was indebted to her at the time of the Transfer.  

(2) The 2^nd defendant was insolvent at the time of the Transfer, or became so as a result thereof.

(3) The interests of the plaintiff’s creditors, including the plaintiff, were prejudiced as a result of the Transfer.

(4) The Transfer was made by the 2^nd defendant with the intentionof defrauding her creditors including the plaintiff.  Essentially the plaintiff relies on the fact that the 2^nd defendant exhibited a lack of an intention to defend the District Court action or to set aside the Judgment, but to arrange for the Transfer after the Judgment had been entered, knowing full well that her interest in the Property was her only substantial asset against which the Judgment could be enforced.

17.In the Defence of the 1^st and 2^nd defendants dated 3 March 2016, it is alleged that:

(1) They have been living apart in different households “for years before 30^th May 2013” and remained separated as at the date of the Defence.  

(2) In so far as the Property is concerned:

“ insofar as it was permissible and enforceable under the law, therewas a common intention and agreement between the 1^st Defendantand the 2^nd Defendant at the time of the purchase of the Property that the 2^nd Defendant would not have any beneficial interest in the Property …

… all the purchase moneys and all repayments of the mortgage loans taken out at the time of the purchase of the Property and subsequently for the purposes of financing the purchase of the Property and all the interest thereon and all legal and other expenses of the purchase and mortgages were met and paid by the 1^st Defendant out of his own funds, and the 2^nd Defendant had not paid any of the said payments, and that insofar as it was permissible and enforceable under the law, there was common intention and agreement between the 1^st Defendant and the 2^nd defendant at the time of the purchase of the Property that the 2^nd Defendant would not have any beneficial interest in the Property ….”

(3) An agreement was made in February 2015 between the defendants that:

“the 2^nd Defendant would transfer all the interest then registered in the Land Registry under her name in respect of the Property, to the 1^st Defendant with the intent and purpose that the 1^st Defendant would then be registered in the Land Registry as the sole legal and beneficial owner of the Property, by reason of the matters as aforesaid and other financial contributions and considerations and matters prevailing at the time and ancillary relief matters in the light of the separation and in contemplation of an intended divorce of the 1^st Defendant and the 2^nd Defendant.”

(4) Any intention to defraud any creditors of the 2^nd defendant is denied.

18.In reply, the plaintiff refers to various bank charges, and the Assignment, which describe both defendants as the “beneficial owner” of the Property.

19.The 1^st defendant has since confirmed, in his witness statementdated 23 December 2016, that he does not intend to take any further actions to defend the plaintiff’s claims, and will take a neutral stance and respect the decision of this Court. 

20.By an Order dated 4 July 2017, Master Hui ordered the 2^nd defendant to disclose her bank statements and passbooks from April to July 2015, as well as utility bills between December 2012 and May 2013 showing that the defendants were living in separate households.  As a result, the 2^nd defendant disclosed:

(1) A bank statement showing that she had a balance of HK$1,676.15 with Hang Seng Bank brought forward from 2014, HK$1,676 of which was debited on 9 October 2014 as credit card payment.  Thus, only HK$0.15 is left as from that date.

(2) A bank statement showing that she had a balance of HK$66 with HSBC brought forward from 2014, and with HK$300 deposited on 26 September 2015.  The balance is HK$366 as from that date.

(3) A bank statement with Standard Chartered Bank dated 2 April 2015, showing that as at that date the 2^nd defendant had HK$243.78 on deposit but owed a total of HK$136,996.06 in relation to three credit cards.  Thus the net position was that she was in deficit of HK$136,752.28 as at 2 April 2015.  Theposition was basically the same in subsequent months: the sum on deposit remained the same, and with the net deficit being HK$135,435.09, HK$134,148.18, HK$133,976.37 and HK$137,740.60 on 2 May 2015, 3 June 2015, 3 July 2015 and 3 August 2015 respectively.

D.   DISCUSSION

21.Section 60(1) of the C&PO states as follows:

“ … every disposition of property made, whether before or after the commencement of this section, with intent to defraud creditors, shall be voidable, at the instance of any person thereby prejudiced.”

22.The crucial question is therefore whether the Transfer was made with the intention to defraud the 2^nd defendant’s creditors[3], more specifically the plaintiff.

D1.   The 2^nd defendant’s evidence

23.The 2^nd defendant’s case is that she did not have any beneficial interest in the Property at any time.  Her evidence is that it was a requirement (or at least that was her understanding at the time) that an application for the purchase of a flat under the HOS had to be made in the name of a married couple. That was why the application was made in the joint names of the defendants, as well as the actual purchase pursuant to the application.  However, since she had no income and it was the 1^st defendant who was going to make all the payments for the purchase and the mortgage loans, it was expressly agreed between them at the time of the purchase that she would not have any beneficial interest in the Property. Rather, it was agreed that she would hold her interest on behalf of the two children, and would transfer her interest in the Property to them when theycame of age.  Otherwise, the 1^st defendant would not be so kind to put theProperty in her name as well since she was not going to make any financialcontributions.  That was why, she says, in the Deed there was a condition that the Property could not be sold, or had further incumbrances created, without the written consent of the son, who had by then came of age, but not the daughter.

24.She also says that she and the two children had been living with the 1^st defendant at the TKT Address until about late 2011, with the Property being vacant until then and only used as storage for miscellaneousitems.  The reason was that the TKT Address was near where the children were attending school.

25.She says she and the two children, but not the 1^st defendant, moved back to the Property in about late 2011. She says that because her daughter was starting school near the Property, it would be more convenient for them to live at the Property.  When asked whether that was the reason for the move, she says yes.  While when asked further about her relationship with the 1^st defendant, she says that they had quarrels from time to time, sometimes big quarrels, she does not expressly say that she and the children moved to the Property because she was separating from the 1^st defendant as a couple because their relationship had broken down.

26.She then says that as she was contemplating going into prison for a long time, and because of the separation and (she says later in her testimony) a likely divorce, she wanted to give back her interest in the Property as that was not hers.  She did not want to have the interest hanging over her head or to leave any connections with the 1^st defendant.  She wanted to give the share in the Property back to the 1^st defendant so that he could hold it for the children.  The Transfer was not effected to defeat or avoid the plaintiff’s claim.

27.I shall deal with 2^nd defendant’s case and evidence below.

D2.   Beneficial ownership of the property

28.First, on the question of the beneficial ownership of the Property, it is a matter of the parties’ (namely the defendants as the joint registered owners) shared intention, actual, inferred or imputed, with respect to the Property in the light of their whole course of conduct in relation to it.  But the starting point is that where there is joint legal ownership there is joint beneficial ownership, and the burden is on the party asserting otherwise (the 2^nd defendant in this case) to show otherwise.  See Stack v Dowden [2007] 2 AC 432 at §§56, 58, 60 and 68 per Baroness Hale of Richmond (with whom Lord Hoffmann, Lord Hope of Craighead and Lord Walker of Gestingthorpe agreed).  See also Lord Hope at §§4 – 5 and Lord Walker at §§14 and 33.  Stack v Dowden has been followed in Hong Kong: see for example Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985.

29.In other words, unless there is evidence on which the Court makes a finding of contrary intention (actual, inferred or imputed), and the burden is high, equity follows the law and beneficial ownership follows the legal ownership (Stack v Dowden at §54 per Baroness Hale).  As stated in Snell’s Equity (33^rd ed, 2015) at §24-049:

“ Where an express trust has not been declared, then the starting point is that equity follows the law, and the beneficial ownership of the property is held in the same way as the registered legal estate in the property. If the property is registered in the name of one party only, then they will be presumed to be the sole beneficial owner. If it is registered jointly in the names of both parties, then it is presumed that they hold for themselves as beneficial joint tenants. This will be the case even where one party has made no financial contribution at all to purchasing the property.”

30.In her witness statement and during her testimony, the 2^nd defendant says that it was the common intention and agreement between her and the 1^st defendant that she would hold her share of the Property for the benefit of the children. An actual, express common intention and agreement is alleged.  However, when the defendants recount in their Defence the alleged common intention and agreement at the time of the purchase, there is no mention of this holding for the children at all.  This is most surprising given that this is the most crucial part of the alleged agreement, if indeed that is the truth.  It is also most surprising that in the Defence it is said that the Transfer was made with the intention of making the 1^st defendant the sole legal and beneficial owner of the Property without mentioning the children’s interest therein at all.  The 2^nd defendant says that the children’s interest is not mentioned in the Defence because the agreement happened a long time ago, and it was “in our minds”.  This is totally incredible given that she is in fact talking about what was supposed to be agreed between her and the 1^st defendant all those years ago, and I simply cannot see how she can omit mentioning the most crucial part of the alleged agreement which she is recounting, ie she was to hold for the benefit of the children, at all.

31.Nor does the Deed mention any right or interest of the children, save that the 1^st defendant cannot sell, or create any further incumbrances over, the Property without the written consent of the son.  The 2^nd defendant agrees that a main purpose of the Deed was to deal with the Property, and if so it is again most surprising for the Deed not to mention the children’s interest in the Property, or to impose any obligations on the 1^st defendant to hold the half share for their benefit, or to transfer the same to them after the daughter has come of age.  It is the 2^nd defendant’s case that she wanted to protect the children, hence the restriction on sale or the creation of any incumbrances, but without the provisions I mention above the Deed is hardly adequate for that purpose.  The provisions she mentions would have the effect of securing the Property as the residence of the children but no more, and certainly not to protect them in the event of a sale.

32.The 2^nd defendant’s explanation of the inadequacy of the Deedin dealing with the Property and the children’s alleged interest is essentiallythat she did not think much about the Property at the time of the Deed, andthat the agreement to hold the Property on behalf of the children was madea long time ago so it was not mentioned, which I find to be incredible given the main purpose of the Deed as aforesaid.  She also says that she should not interfere too much as the children would have their own plans when they grew up, and so she did not insist on a clause providing that the children would be entitled to half of any sale proceeds. This is again incredible given the main purpose of the Deed and the 2^nd defendant’s intention to protect the children.

33.The 2^nd defendant’s claim that she did not have any beneficial interest in the Property is also contradicted by the Legal Charges and the Assignment, which she signed as beneficial owner.

34.The 2^nd defendant says that she did not transfer a half share of the Property to the children because that would attract a premium.  But that does not explain the need to have the Transfer to the 1^st defendant.

35.There is no objective evidence to support the 2^nd defendant’s assertion that the application under the HOS had to be made in the joint names of a married couple, or that she actually thought so, and I decline toaccept this assertion.  This is not mentioned at all in her witness statement which again I find surprising if it were true.

36.For the above reasons, I reject her evidence that she held the Property on behalf of the children by reason of an actual express agreement, and pursuant to an actual intention shared, with the 1^st defendant. 

37.Given her unequivocal evidence in her witness statement and her testimony that she was holding her interest in the Property for the children as a matter of actual agreement, it is not her evidence that she was holding the Property for the benefit of any other person, including the 1^st defendant, pursuant to any actual intention or agreement.  There is therefore no basis for me to so find.

38.There is nothing for me to infer or impute any intention that the 2^nd defendant was to hold her share of the Property on behalf of anyone else, including the 1^st defendant.  While I do accept her evidence that she had no income since she got married and the 1^st defendant made all the payments for the Property, that does not mean, in a domestic context, that that fact alone justifies the finding or inference of an intention that the 2^nd defendant did not have any beneficial interest in the Property but was holding it on trust for the 1^st defendant.  If one asks, as the 2^nd defendant does, why would the 1^st defendant be so kind to let the 2^nd defendant to have a beneficial interest in the Property when she was not going to make any financial contributions, then equally one may ask, why would he intend to let the children, who were also not going to make any financial contributions,have such an interest when they grew up?  They were all his closest family members.  I can see no rational answer.

39.In Stack v Dowden at §14, Lord Walker said:

“ …in cases where a house or flat has been registered in the joint names of a married or cohabiting couple (but with no express declaration of trust) there will be a considerable burden on whichever of them asserts that their beneficial interests are unequal, and do not follow the law.” (See also Baroness Hale at §§68 – 69.)

40.Further, as stated in Snell at §25-006:

“ In practice, however, the resulting trust doctrine is now unlikely to be relevant where the contributors are a married or cohabiting couple or other members of a family, and purchase the property as a joint home for themselves. Here, it is more likely that they intend the beneficial interest to be shared between themselves according to some informal common intention. The evidence from which the court would infer their common intention extends more widely than their monetary contributions to the purchase. In practice, therefore, resulting trust reasoning where property is purchased in another person’s name will mainly be relevant outside a domestic setting, and where the parties are acting for commercial motives or are making the purchase as an investment.”

41.Since there is nothing to displace the presumption that the defendants being the joint legal owners were also the joint beneficial owners, the burden being on her, I find that the 2^nd defendant was until the Deed a joint beneficial owner of the Property with the 1^st defendant.

D3.   Separation

42.I also reject the 2^nd defendant’s case that she had separated fromthe 1^st defendant since late 2011, in the sense that there was a breakdown oftheir marital relationship. While I accept her evidence that since late 2011 the 2^nd defendant and the two children had been living at the Property but the 1^st defendant did not (otherwise no doubt the plaintiff would have said so in her witness statement), that does not mean that there was a separationin the sense of a breakdown (which supposedly culminated in, and explains, the “giving back” by the 2^nd defendant of her share of the Property).  As stated above, when asked, the 2^nd defendant says that the reason for her andthe children to move back was for the convenience of the daughter, and not because of a breakdown.  There is evidence that as late as 2015 the 2^nd defendant still used both the TKT Address and the Property as her addresses (see §14 above), thereby suggesting she still considered the TKT Address (where the 1^st defendant lived) to be her home.  Further, the contents to the Deed (§10(1) and (2) above) also contradict the 2^nd defendant’s evidence in this regard.  The 2^nd defendant is unable to give any credible explanations.  She tries to blame the solicitors in so far as the use of addresses on the Deed and the Assignment, and the drafting of the Deed, are concerned, but I do not see any basis for me in effect to find that the solicitors did not take instructions, and did the drafting, with proper care.

43.Notwithstanding Master Hui’s order, the 2^nd defendant has notproduced any utility bills to show that she and her husband had been living in separate households.

44.The facts that the contract of employment between the plaintiff and the 2^nd defendant states that the plaintiff was to serve two adults and two children, and that photographs of the family including the 1^st defendant were placed at the Property, also suggest that the 2^nd defendant still considered the 1^st defendant to be part of the family and the household, andthat they were not separated in the sense of their relationship having broken down.  The 2^nd defendant does not challenge the plaintiff’s evidence on those facts.

D4.   Reason for the transfer

45.Since I reject the 2^nd defendant’s case that she did not have the beneficial ownership of the Property, or that she had separated from the 1^st defendant in the sense of a breakdown in relationship, I must similarly reject her evidence as to why she effected the Transfer, namely, by reason of the separation and imminent imprisonment and possible divorce, she was to give back what she did not own to the 1^st defendant for him to hold it for the children.  If she was really holding the Property for the children, I do not see why there was a need for her to transfer the half share back to the 1^st defendant.  She could continue to hold the Property for them whilst in prison.  She is unable to give a satisfactory answer to that.

46.I therefore reject the 2^nd defendant’s case on the reason for the Transfer.

D5.   Whether conditions in section 60 satisfied

47.What I am left with is the objective situation where the 2^nd defendant, having completed a criminal trial on charges of inflicting personal harm on the plaintiff, and whilst awaiting verdict, she began to take steps to transfer her half share of the Property away unconditionally and at nil consideration by executing the Deed.

48.On her own evidence, she had and has no other assets and owed (and still owe) a lot of money on credit card spending which she wasand is unable to repay, and was and is clearly insolvent but for her interest in the Property, and I so find. 

49.The 2^nd defendant argues that there was no civil action by the plaintiff at the time of the Deed, and she did not know that she would be facing a civil claim and could not be doing anything to avoid the consequences thereof, as she could not predict the future (ie that the plaintiff would issue a civil claim against her).  She also says that if she were to take steps to put the Property out of the plaintiff’s reach, she could have done in the many months before her criminal trial, and there was no reason for her to wait until 6 February 2015.

50.I reject this argument of the 2^nd defendant. I do not think that it is really predicting the future to expect, in the situation of the 2^nd defendant facing the accusations of the plaintiff, a civil claim soon.  As Mr Ko, counsel for the plaintiff, says, this is just common sense.  Rather, in the words of the 2^nd defendant herself in her witness statement, after the trial finished and whilst waiting for the verdict, “the prediction of the results to be announced on 10^th February 2015 was not favourable”, and the possibility of an “immediate, lengthy custodial sentence” was contemplated by her.  She says that her counsel for the criminal trial advised her to prepare to lose, and, because of that, she had to put everything ready.  In my judgment, it is precisely because of the acceptance of the reality that she was going to go down after the criminal trial that she beganto take steps to put the Property out of the plaintiff’s reach in contemplation of a possible civil claim.  That explains why she had not done it earlier.

51.The 2^nd defendant also argues that since a half share of the Property would be worth several millions of dollars while the plaintiff’s claim is less than one million, why would she transfer away her interest in the Property as she would still be pocketing a large sum after selling the Property and paying off the plaintiff.  But the reality is that if that happens,the defendants would lose a residence and would be almost a million dollars worse off, and thus this rhetorical question is no answer to the plaintiff’s case that the Transfer was effected to avoid satisfying the liability to her.

52.The result is that her creditors, including future creditors suchas the plaintiff, were and are subjected to a significant risk, indeed a virtual certainty, of being unable to recover their debts in full.

53.In Tradepower (Holdings) Ltd v Tradepower (HK) Ltd (2009) 12 HKCFAR 417, Ribeiro PJ said, after discussing extensively the rule in Freeman v Pope (1870) LR 5 Ch App 538 and subsequent authorities:

“ 85. Three alternative approaches to establishing the necessary intent to defraud creditors emerge from the cases discussed.

(a) First, there is the approach which essentially denies the applicability of the rule in Freeman v Pope, requiring an actual dishonest intent to defraud creditors to be established as a matter of fact on the whole of the evidence in every case, and treating the combination of insolvency and a voluntary disposition merely as material from which an inference of the necessary intent may be drawn (with those features making it perhaps easier to draw the inference).

(b) Secondly, there is the approach which favours applying the rule in Freeman v Pope as an irrebuttable presumption of law, so that proof that a disposition was made by an insolvent disponor thereby putting the creditors at risk of being unable to recover their debts constitutes in law the statutory intent.

(c) Thirdly, there is the approach which treats the requisite intent to defraud as a matter of fact to be inferred from theevidence as a whole but recognizes that the circumstancesin Freeman v Pope type cases are sufficient in themselvesto justify drawing that inference without more, whether or not the disponor actually had his creditors in mind when making the disposition and ignoring any assertions that he acted for motives other than an intention to defraud his creditors.

86. With both the second and third alternatives, it is accepted that where a case does not factually fall within the rule in Freeman v Pope, s.60 is not engaged unless the evidence justifies inferring an actual intent to defraud on the disponor’s part.

87. In my opinion, the policy of s.60, the overall balance of persuasive authority and the compelling logic of the rule in Freeman v Pope favour the adoption of either the second or thirdalternatives, which, as Blanchard J noted, are likely to differ littlefrom one another in practice. Having to choose between them, Ifavour the third alternative (with a minor qualification mentionedbelow) since, to modern ears, the phrase ‘intent to defraud creditors’ is more naturally suited to the language of inference rather than the language of irrebuttable presumptions. One would expect such an intent to be inferred as a state of mind possessed by the disponor rather than something attributed to him by imputation of law.

88. I would formulate the applicable rule for cases like Freeman v Pope as follows.  Where it is objectively shown that a disposition of property unsupported by consideration is made by a disponor when insolvent (or who thereby renders himself insolvent) with the result that his creditors (including his future creditors) are clearly subjected at least to a significant risk of being unable to recover their debts in full, such facts ought in virtually every case to be sufficient to justify the inference of an intent to defraud creditors on the disponor’s part. In cases falling outside the rule, that is, in cases where the disposition is made for valuable consideration, or where the disponor is not insolvent or where the disposition does not deplete the fund potentially available to the creditors, an actual intent to defraud creditors must be shown as an inference properly to be drawn on the available evidence before s.60 is engaged.”

54.Since the Transfer was a disposition of property at nil consideration by the 2^nd defendant when insolvent (or would thereby became insolvent) with the result that her creditors, including future creditors such as the plaintiff, were clearly subjected to at least a significantrisk of being unable to recover their debts in full, I am entitled to, and I do, draw an inference of an intent by the 2^nd defendant to defraud creditors on her part. 

55.The above is sufficient for the purpose of this case but I will go further.  In all the circumstances of the case as referred to in §§45 – 51 above, I find that the Deed was made by the 2^nd defendant as a matter of fact for the specific purpose of putting into train the Transfer with the actual intention of putting the Property out of the plaintiff’s reach in the light of her imminent civil claim.  If the Deed was made with the genuine intention of effecting a separation, which I reject, I find it surprising that no real financial provision was made for the 2^nd defendant given her lack of financial means, or adequate protection be provided to the children in terms of their alleged interest in the Property.  Even the maintenance for the 2^nd defendant, which was the only matter in her favour, was to be agreed,which leaves her with no real protection after transferring away her interest in the Property.  Further, when the Transfer was actually effected, there was already an interlocutory judgment entered against her, and so she knew as a fact that she would be liable to pay damages to the plaintiff.  The conclusion that the Transfer was actually made with the actual intention of defrauding the plaintiff in the sense of defeating her claim is unavoidable, and I so find. 

56.I do not find the fact that there was a draft assignment providing for consideration to be of assistance one way or another.  The fact is that the whole process of the Transfer started with the Deed providing for an unconditional transfer, and ended with the Assignment at nil consideration.  The 2^nd defendant was unable to explain why there was this provision for consideration, but there is no basis for me to make any findings or to drawany inference as to what happened in between, or how this provision came about.

57.It is also clear to me that the intention I infer and find at §§54 and 55 above must have been shared by the 1^st defendant, being a willing and co‑operative party to the Transfer with full knowledge of all the facts.  I so find.

58.There is also no doubt that the plaintiff is prejudiced by the Transfer, as any final judgment for damages that she may obtain against the2^nd defendant is most likely to be rendered unsatisfied or largely unsatisfied,with the 2^nd defendant’s only valuable asset having been transferred away.  

59.The conditions for invoking section 60 of the C&PO are clearly satisfied.

E.   DISPOSITION

60.I make a declaration that the transfer of the Property pursuantto the Assignment dated 17 July 2015 constitutes a disposition of propertyby the defendants with intent to defraud creditors (including future creditors) and to obstruct or delay the execution of any judgment that may be made against the 2^nd defendant and thus is voidable at the instance of the plaintiff being prejudiced thereby pursuant to section 60 of the C&PO.

61.I also order that the Transfer be set aside.

62.The Statement of Claim also asks for an order of attachment of the Property under Order 44A, rule 7 of the Rules of the High Court (Cap 4A) so that it can be available for satisfaction of any judgment under DCPI 569/2015.  But it appears to me, and accepted by Mr Ko, that that rule is only available for a judgment to be obtained in the same action, and not in another action.  I decline to make such an order.

63.The parties agree that costs should follow the event.  I make an order that the 2^nd defendant is to pay the costs of this action to the plaintiff, to be taxed if not agreed.  The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.

64.I thank Mr Ko and the 2^nd defendant for their assistance.

Mr Tony Ko, instructed by Boase Cohen & Collins, assigned by Director of Legal Aid, for the Plaintiff

The 1^st Defendant was not represented and did not appear

The 2^nd Defendant appeared in person