Tjb or Jbt v. Dmt
Read the full judgment text of FCMC 9861/2014 on BabelCite. This Family Court judgment was delivered on 20 September 2021 before His Honour Judge I Wong.
Ancillary Relief – Matrimonial Proceedings and Property Ordinance – Division of Assets – Nepal Lands – Clean Break – Sharing Principle – Costs – Long marriage – Valuation dispute – 40/60 split – Costs to husband
Legal issues: Division of landed properties in Nepal · Departure from equal division · Costs of ancillary relief proceedings
Outcome: Ancillary relief granted; clean break ordered; lands sold and proceeds divided 40/60; lump sum payment; costs to husband.
Cited by 1 case · Cites 4 cases
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FCMC 9861/2014 [2021] HKFC 186 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 9861 OF 2014 ----------------------------
--------------------------- Coram: His Honour Judge I Wong in Chambers (Not Open to Public) Dates of Hearing: 11 & 12 August and 17 August (half-day) 2021 Date of Judgment: 20 September 2021 __________________ J U D G M E N T ( Ancillary Relief ) __________________ 1.This is a trial on the ancillary relief of an undoubtedly long marriage. 2.For the ease of reference, notwithstanding that the decree absolute has been granted on 10 February 2017, I shall continue to refer to the petitioner as “the husband” and the respondent “the wife”. Background 3.Both parties are Nepalese by origin and have been settling in Hong Kong for many years. 4.They were married in Nepal in 1973 when the husband was 26 years old and the wife was nearly 16. 5.This marriage has 3 children. 6.The eldest child is a daughter, born in Hong Kong. She is 46 years old, single, and is living with the wife in Hong Kong. 7.The second child is a son, now aged 44. He is married and is living with his family in Hong Kong. At trial, he acted as the McKenzie friend for the wife. 8.The youngest child is a son, now aged 40. He is still single, living in Nepal, and is a medical practitioner. 9.All the children are independent and in gainful employment. They are close to the wife but estranged from the husband. 10.The husband asserted, in his petition for divorce taken out in July 2014, that he had separated with the wife since October 2010. This was hotly disputed by the wife who had filed an Answer in the defence of the proceedings. I was told instead of running a full trial on the main suit, the husband had chosen to wait for another 2 years as a result of which leave was granted by HH Judge Melloy for the husband to file a Supplemental Petition, which he did on 27 July 2016. The Supplemental Petition pleaded that the parties had separated from each other since 27 July 2014. This was uncontested and the decree nisi was duly granted on 6 December 2016 on that factual basis. Present Situation of the Parties 11.The husband is nearly 74 years old and the wife is 64. 12.The husband has remarried in April 2017. He is living with his present wife, also from Nepal, in a rented flat. This is a childless marriage. 13.The wife is living with the parties’ daughter. Issues in Dispute 14.The husband served in the British Army, stationing in the United Kingdom, Hong Kong, Brunei and Malaysia between 1965 and 1984. He is entitled to a monthly pension from the British Army which is payable in Nepal, the current rate being about $4,600 per month. The husband has been in receipt of the pension since his remarriage in April 2017. Before then, it seemed it is not in dispute that over all these years the wife had been in receipt of the monies in support of the family. The wife’s eye is on the British Army pension of which she is seeking half. 15.The parties own 9 pieces of land in Nepal, 6 are in the name of the husband and the remaining 3 in the name of the wife. As I shall explain below, the market values of these landed properties are hotly in dispute. In reliance upon his/her own valuation, both are saying that the other party’s properties are worth a couple of times more than his/her properties. 16.With this background, the main issues at trial are, first, whether the husband should pay any maintenance payment in favour of the wife. The second issue is how the family assets, mainly in the form of the landed properties in Nepal, are to be divided between the parties. 17.These issues are apparently straight-forward ones and should not have warranted extended time and costs to be incurred. Yet, as I shall explain when I deal with the parties’ landed properties below, unfortunately the issue of how much the lands are worth has taken the parties a long way to come to this Judgment. Parties’ Open Offers The Husband’s Open Offers 18.At the Pre-trial review, the husband, on a clean break basis, made two alternative open offers. 19.The first is he is to receive 25% of the wife’s properties and the wife would have 75% of his properties. This would result in the wife having more than half of the total family assets if the valuation of the husband’s expert on the value of the lands is adopted. 20.Alternatively, the husband is agreeable to have the parties’ landed properties swapped. This would again result in the wife having more than half of the total family assets if the valuation of the wife’s experts on the value of the lands is adopted. 21.At the beginning of the trial, the husband made a third open offer. He is willing to accept 25% of the parties’ properties, whatever their values are. The Wife’s Open Offer 22.At the beginning of the trial, the wife offered each party is to keep his/her landed properties plus half of the British Army pension to be paid to her. The Wife’s McKenzie Friend and No Oral Evidence from the Wife 23.The wife previously conducted these legal proceedings with legal representation provided by the Director of Legal Aid. Her legal aid however was discharged on 20 December 2019. She has since been conducting the legal proceedings on her own, at least as far as the official record is concerned. I say so because it is clear that she has had someone with some legal knowledge behind her in preparing for the case, as can be seen from the documents such as her affirmation, written submissions and finally, the list of questions produced by her for the purpose of cross-examination of the husband. 24.At trial, she also had the assistance of her son (the 2nd child) as her McKenzie friend. 25.The wife claimed in her Opening that the laws of Nepal do not allow division of assets just between the husband and the wife. There is, however, not any expert legal evidence in support of this assertion nor has there been any application in this regard. She also claimed their children, who had financial contribution, do not allow the division of the assets. The assets must be divided amongst them and their children. In this regard, it should be noted that the children, who are on their mother’s side, are aware of the present proceedings but they have not made any application for appearance. 26.For the purpose of her cross-examination of the husband, instead of asking him questions one after the other, the wife produced a list of 30 questions (in English) seeking answers from the husband. Some of these questions were apparently not relevant to the issues to be determined and some of them the wife was not able to explain their relevance. At the end, 7 questions were allowed to be put to the husband. 27.The wife elected not to give oral evidence at the trial due to, as claimed, her health issues. I accept the wife adduced some medical evidence in her narrative affirmation such as her Esophago-Gastro-Duodenoscopy Report and the Ultrasound Report and that she underwent an abdominal hysterectomy in Nepal in October 2019. Yet, I fail to see how the medical evidence could support her assertion that she was not fit for giving evidence. The wife remained firm in her decision not to give evidence even after I had explained to her that in the absence of her oral evidence, the truthfulness of her affirmation evidence and the veracity of her case could not be tested by way of cross-examination. In the circumstances, little regard should be given to her affirmation or any statements in the guise of evidence: see LWTC v PTH and Anor, FCMC 1648/2011 (unreported, 28 May 2012) at [47] to [49]. The Law and Legal Principles 28.The jurisdiction of the court in granting financial provision for a party is governed by section 4 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”). Pursuant to sections 6 and 6A of the same legislation, the court has the power to grant orders for transfer, settlement or sale of properties. 29.The principles upon which this case is to be considered are the conventional ones, namely those set out in section 7 of MPPO which confers a broad discretion on judges dealing with ancillary relief. That said, these principles are to be interpreted in the light of the Court of Final Appeal judgment in LKW v DD (2010) 13 HKCFAR 537. In that case, Riberio PJ referred to the four principles which are applicable to all ancillary relief proceeding, viz, (1) the objective of fairness: [56], (2) rejection of discrimination: [57], (3) the yardstick of equal division: [58] – [61] and (4) avoidance of ‘minute retrospective investigation’: [62] – [69]. 30.Ribeiro PJ further set out the steps to be taken by the courts in undertaking the exercise. In brief, they are:
31.Lastly, I do bear in mind the reminder given by Thorpe LJ in Parra v Parra [2003] 1 FLR 942 at [22] that the proper judicial task of the court is to exercise a singularly broad judgment that obviates the need for the investigation of minute detail. Financial Resources of the Parties The Lands in Nepal 32.The major assets are the parties’ landed properties back in Nepal. As mentioned above, there are altogether 9 pieces of land, 6 are in the name of the husband and 3 in that of the wife. 33.The crux of the dispute is centred upon the market values of these lands. I would say this is unusual because normally the court would have the assistance of a single joint expert who would have made a valuation before the trial. This is not the case here. It is necessary to refer to the history of the proceedings to explain why this happened. 34.To begin with, as I mentioned in [10] above, since the husband’s petition of July 2014 was strenuously contested, he chose to wait for another 2 years so as to put the issue of separation beyond dispute. 35.On 18 April 2017, the judge dealing with the Financial Dispute Resolution (“FDR”) gave the usual directions for the parties to agree on the value of their lands within 2 months, failing which a single joint expert be agreed and appointed by the parties for the purpose of preparing a valuation report. In the event a single joint expert to value the lands cannot be agreed then the court would appoint a single joint expert for the parties after having considered the credentials of candidates. 36.At that point both parties experienced difficulty in finding a professional property valuer in Nepal. At one point, both parties proposed to have the valuation done by an engineer but that was declined by the Judge who took the view that engineers were not suitable for the purpose and neither appeared to have any expertise with valuations or court work. By her direction dated 13 April 2018 the parties were required to make further enquires to see whether or not any other options available for the appointment. 37.I was given to understand by Mr Massie that in order to enable the parties to have more time to find a professional property valuer, the FDR callover hearings had been adjourned several times. 38.The situation was further complicated by the fact that the wife was stranded in Nepal for a couple of months in 2018 because of her medical condition. 39.Finally, the husband was able to locate a Chartered Surveyor in Nepal for the purpose of preparing a valuation report. While the wife opposed to the proposal, she did not suggest any alternative candidate. 40.On 31 July 2019 the FDR Judge transferred the case to the Principal Family Judge for case management and made an order that valuation of all landed properties shall be prepared by the husband’s valuer, to be provided on 25 October 2019, the date on which the parties were due to appear before the Principal Family Judge. 41.The husband failed to produce his valuation report as directed on 25 October 2019. Thereupon HH Judge CK Chan ordered the parties to file and serve their respective valuation reports on or before 17 January 2020, failing which party(ies) in default be debarred from calling valuation evidence at trial. 42.Once again, the timeframe was not kept. The husband’s valuation report was only obtained on 13 February 2020 and the wife’s report was obtained on 5 August 2020. 43.On 13 May 2020, the husband issued a summons seeking to adduce his valuation evidence at trial without calling the maker. 44.Hence, when the matter came before me for the first time on 10 August 2020, I was faced with two expert reports, both were filed out of time without leave. Not only that the reports gave polarized valuations (which I shall refer to below), they were also prepared by different professionals. The husband’s report was prepared by a surveyor and the wife’s was by two civil engineers. 45.The matter was further complicated by the evidence adduced by the wife, by way of a letter from the office of her municipality, that according to the laws of Nepal the right to do valuation in Nepal is only given to Civil Engineers. The wife’s assertion that valuation of land in Nepal could only be conducted by civil engineers of course did not accord with the practice in Hong Kong. There were also other challenges mounted by the wife on the truthfulness of the husband’s report, alleging that the husband’s expert had not paid any site visit for valuation and that the husband was submitting a faked report. 46.At the beginning of the trial, I gave leave for parties to adduce their valuation evidence without calling the makers. 47.As said, the parties’ experts gave polarized valuations; their respective valuations are set out below (adopting an exchange rate of NPR 1 : $0.065):
48.As can be seen above, each party is claiming the other side’s landed properties are far more valuable. 49.On the face of it, the husband’s report contained more useful information but unfortunately both reports gave little analysis on how the figures were obtained; specifically, there were no comparables for reference, as can normally be found in reports of this nature. 50.Faced with this corundum, I directed that further comments and answers were to be provided by the experts according to 26 questions approved by this court after having considered parties’ suggested questions. These questions aimed at seeking clarifications on the legal regime of land valuation (for instance, the type of professionals qualified to perform land valuation according to the laws of Nepal), the significance of government rates in terms of its impact on the value of land, how the experts’ figures were arrived at (including whether any site visits had been made), and, most importantly, on why the experts said the other side’s report was flawed. 51.I have carefully considered the further comments and answers. While I have the impression that, as regards the type of professionals who are qualified to do valuation in Nepal, each party was quoting the legal codes that were favourable to their case, I must say the husband’s expert gave more useful and comprehensive replies that gave weight and credibility to their figures. 52.The husband’s lands were inherited from his father; they are located in the remote western part of the country without services or proper access. There is a house erected on one of these pieces of land that used to be occupied by the husband’s father. The husband testified that it is in a derelict state. The other 5 pieces are for agricultural purpose. The husband’s evidence as regards the location and the condition of the lands have not been challenged by the wife. The total areas of these lands are 96,360 ft2. Apart from the bare assertion of the wife, there is no evidence that the lands have been generating any rental income. 53.The wife’s lands form one single lot with a 4-storeyed house built on them. The lands are located in a suburb of Kathmandu, the capital city, with utilities services and access road. The husband testified that the house is very near to downtown Kathmandu. Again, this evidence has not been disputed by the wife. According to the wife’s expert, the lands have a total built-up area of 3,009.58 ft2. 54.I am aware that, in terms of the size, the husband’s lands are significantly larger than those of the wife’s but it has to be borne in mind that the wife’s lands are close to the downtown of the capital. The parties are of course not professional valuers. Yet, it does not mean they, as natives there and as owners of the lands, do not have any ballpark figures or rough ideas as to how much the lands are worth. It is therefore telling that when the husband made his open offer in the Pre-trial review and at the beginning of the trial that their lands were to be exchanged, that was rejected right away by the wife. There was no reason for the wife to have rejected this offer when her own expert said the husband’s lands are worth nearly double that of her lands. 55.Considering all these materials in the round, while I cannot come to a view on the values of the lands by way of some figures, I can confidently come to a conclusion that the wife’s lands are more valuable than those of the husband’s. For this reason, I come to a conclusion that the wife’s valuation cannot be relied upon and that the husband’s valuation is, on balance, closer to the real situation, though I cannot rule out the possibility that the wife’s lands have been overrated and/or the husband’s lands underrated. The Other Assets 56.The other assets are not of substantial amount and are largely undisputed. Their particulars are as follows:
The Wife’s Liabilities 57.The wife reported in her Form E of 12 January 2015 that since about July 2014, she had borrowed about $55,000 from her children and friends to sustain her daily expenses. This disclosure, however, was not supported by any particulars, documentary proof or oral evidence. The husband, in evidence, disputed the genuineness of the claim. He said the wife has been relying on their daughter who is single and working and has been living with her. It was not necessary for the wife to have incurred the alleged liabilities. Since the wife has chosen not to go to the witness box, if there were really such loans, it remains unknown as to who the children or her friends are and how much each of them lent and whether any of these monies have been repaid since the Form E. For this reason, the wife’s claim must be rejected. The Husband’s Earning Capacity 58.Upon retirement from the British Army in 1984 the husband returned to Nepal. It is unclear as to what he had been doing for a living there. From 1990 and 1995, the husband went overseas again and served in the Oman Special Force. He then came to Hong Kong in 1997 and has since been settling here. A few years later, the wife joined the family. 59.Mr Massie submitted that given the husband’s age and the fact that he is years past normal retirement it is unlikely he will find alternative employment. It is submitted on the husband’s behalf that he cannot be said to have an earning capacity. 60.The husband will turn 74 years old in October. When the husband was younger he used to work mainly in the construction industry. In recent years, probably because of his age, he turned to work as a security guard. He last worked as a security guard in July 2021. At the time of trial, he had just finished his one-year contract and was unemployed. His last remuneration package was about $22,000 per month. The husband is diagnosed with diabetes and has been on medication. He however fairly conceded that his health issues do not affect his work. The husband testified that his employer has asked him to sign the agreement if he would like to continue to work. Thus, it is likely that he would be able to work for another year. 61.I take the view that the husband may be able to work for another year or so, yet this cannot last for long. The objective fact is he has long passed the normal retirement age. I have no doubt he has very limited earning capacity. Very soon he would have to rely upon the British Army pension that is now standing at about $4,600 per month and the financial resources that the family amassed during their heyday. The Wife’s Earning Capacity 62.The wife claimed to be an illiterate. She used to be a homemaker back in Nepal. At the time of her Form E of 12 January 2015, she reported her work as a dish-washer, earning about $8,900 per month. In her narrative affirmation, she claimed to have no income and has been unemployed since May 2016 due to ill health. 63.The wife is 64 years old. She claimed to have been suffering from asthma and stress. I consider that, same as the husband, given her age and lack of education and skill, the wife has very limited earning capacity.
The Husband’s Financial Needs 64.The husband is currently living with his wife in a rented flat for $7,000 a month. His wife is 33 years old and is in gainful employment. The husband accepted that his wife also contributes to the general expenses of the household. I would therefore halve the general expenses. The husband’s reported expenses have not been challenged by the wife. In any event, I consider both the individual and the overall figures are reasonable. His monthly needs are assessed as follow,
65.I round up the figure to $12,000. 66.The husband is nearly 74 years old. Assuming that he has 10 more years to live and that he is to receive a monthly pension of $4,600, he would need a capital sum of about $888,000 (($12,000 - $4,600) × 120 months). The Financial Needs of the Wife 67.In her Form E of January 2015 the wife reported earning a monthly sum of about $8,900 (with lunch provided) but reported a monthly expenditure of $22,020, with $16,500 being general expenses and the remaining $5,520 personal expenses. The wife has been living with her daughter. It seems quite obvious that, on the face of the figures, the general expenses covered both of them. Of the personal expense, she said her Clothing/Shoes and Personal Grooming needed $1,000 each. These, in my view, were on the high side. It should be noted that in her narrative affirmation the wife claimed her monthly expenses were around $6,000. In any event, in the absence of any particulars or oral evidence from the wife, these figures have not been subject to test. If a figure has to be given, for the reason that both the husband and the wife are living with someone in gainful employment, I consider it is fair that the wife is to be given the same figure, ie $12,000 per month. 68.There is however one caveat: the wife has claimed at trial and in her narrative affirmation that she intends to return to Nepal for good after the conclusion of these proceedings. In that event, given that the cost of living in Hong Kong is notoriously one of the highest in the world, I have no doubt that her monthly needs in Nepal should be far less than $12,000. As a matter of fact, some hints may be gathered on how much she would require in that event. She said in her Open Offer that she would need half of the pension, which means about $2,300 per month. Together with the rentals of $4,300 that, according to the husband, she would be able to collect from the house in Nepal, this would give a total of about $6,600. 69.The wife is 64 years old. Assuming broadly that she has 20 more years to live, she would need a capital sum of $1,584,000 ($6,600 × 240 months). 70.The parties therefore would need a capital sum of $2,472,000 ($888,000 + $1,584,000) to meet their financial needs in the years ahead. The husband takes up roughly 36% of the sum, with remaining 64% goes to the wife. I am fully aware that the wife’s share does not include the wife’s housing need in Nepal in the event that her house is to be sold. The costs for housing in Nepal should be significantly less than those in Hong Kong. I shall deal with this below. Deciding to Apply the Sharing Principle 71.I have determined that both the husband and the wife have a fast-diminishing earning capacity. It is rather fortunate that they have been able to own some valuable assets in the form of real properties back in their home-country from which they could make use of for meeting their financial needs in the years ahead. Thus analysed, it seems clear to me that my primary task is to make use of the family assets to meet the financial needs of the parties. After this is done, I should consider how the surplus assets are to be divided between them. 72.I have assessed the parties would need about $2,472,000 in the years to come. I consider that even a conservative approach is adopted such that the parties’ lands are worth only half of the values as assessed by the husband’s expert (ie about $3,208,198 ($6,416,396 ÷ 2) : see [47]), there would still be assets more than sufficient for meeting the parties’ financial needs. 73.The court generally decides, at this stage, that the sharing principle applies to the total assets, so that they should be divided equally between the parties unless good reason exists to the contrary: WLK v TMC (2010) 13 HKCFAR 618, at [82]. Whether good reasons for a departure from equality exist 74.Mr Massie submitted that this was a marriage of 41 years (on the uncontested version pleaded in the Supplemental Petition) which by any standard is a long one. The usual 50/50 split of capital assets should be the starting point. I agree. Each had contributed his or her due share to the family prior to the breakdown of the relationship, the present case is one that seems to me equal division is just and fair to both parties. 75.The husband’s properties were inherited from his father during the marriage. It is not the husband’ case that they should be excluded. According to the wife’s affirmation, before the breakdown of the marriage, the husband was the sole breadwinner; all the expenses were paid by him and she was a homemaker. I am sure this was also the situation back in Nepal during the long period of their marriage. The wife was all along a housewife without any income, the purchase money for her lands, together with the mortgage repayments, must have been originated from the husband. These lands are clearly fruits of their matrimonial partnership. On that view, and together with the long duration of the relationship, I do not see any justification to depart from equal division. 76.That said, I must not lose sight of 2 factors. The first is that, being 10 years younger than the husband, in the normal course of event the wife would have a higher financial needs. The second is that upon return to Nepal the wife would have her own housing need. For these reasons, I think in fairness there should be a departure from equal division. Considering that this is a long marriage in which both parties contributed their fair share, I am of the view that the assets should be divided in the proportion that the husband is to have 40% and the wife is to have the remaining 60%. Deciding the overall outcome 77.I need to step back and look at the overall impact. Parties should get on with their lives and to start afresh. Taking all these considerations in the round, I am of the view that a clean break is possible. The parties should be able to meet their financial needs out of their share of the family assets and at the same time get on with their lives. 78.Mr Massie, on behalf of the husband, agreed that the lands should be liquidated for the implementation of the division. I agree. The 9 pieces of land should be sold as soon as possible with the proceeds of sale to be split in 40/60 portion. I would give them 6 months to liquidate the assets. 79.The remaining assets are worth about $81,800. They should also be split in the like manner (ie the husband $32,720 and the wife $49,080). The wife is already in possession of $16,800, so the husband should pay an equalization money of $32,280 ($49,080 - $16,800). 80.As I have already taken the husband’s pension when assessing the capital he needs into account, the husband is entitled to keep the pension. Orders 81.For the above reasons, I make the following orders:
Costs 82.In terms of the awards given it is clear that the husband is successful in his application. Indeed, I consider that the husband all along has taken a reasonable stance while that of the wife is both uncompromising and unreasonable. Taking a board-brush approach, I am of the view that the husband should be given the costs of the ancillary relief proceedings. 83.I make an order nisi that the wife do pay the husband the costs of the ancillary relief proceedings (including all costs reserved), to be taxed if not agreed. The husband’s own costs to be taxed in accordance with the Legal Aid Regulations.
Mr John Massie of Massie & Clement, Solicitors, on the instructions of the Director of Legal Aid, appeared for TJB or JBT, the petitioner DMT, the respondent, appeared in person | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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