Wpp v. Cyk
Read the full judgment text of FCMC 8240/2015 on BabelCite. This Family Court judgment was delivered on 24 December 2021 before Deputy District Judge Susan Wong.
Matrimonial Causes – Ancillary Relief – Matrimonial Home – Post-nuptial Agreement – Validity – Asset Division – Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO) s.7(1) – LKW v DD [2010] 13 HKCFAR 537 – Radmacher v Granatino [2011] AC 534 – SPH v SA [2014] 3 HKLRD 497 – Whether post-nuptial agreement binding – Court held agreement not given weight as Respondent did not sign under free will or with full appreciation – Division of assets – Yardstick of equal division applied – No good reason to depart – Former matrimonial home sold and proceeds divided equally – Petitioner bears costs.
Legal issues: Validity of Draft Minute · Division of former matrimonial home
Outcome: Ancillary relief granted; former matrimonial home to be sold and proceeds divided equally; Petitioner to bear costs.
Cites 2 cases
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FCMC 8240/2015 [2021] HKFC 252 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 8240 OF 2015 _______________
_______________ Coram: Deputy District Judge Susan Wong in Chambers (Not Open to Public) Date of Hearing: 2-3 November 2021 Date of the Parties’ Closing Submission: 1 December 2021 Date of the Parties’ Submission in Reply: 15 December 2021 Date of Judgment: 24 December 2021 --------------------------- JUDGMENT (Ancillary Relief ) --------------------------- 1.This is an application made by the Respondent Husband (“H”) for ancillary relief against the Petitioner Wife (“W”). Brief background of the case 2.Parties met each other in 1990 and started courtship in about 1992. H was working as a travel agent at the time whereas W was a student. The parties married on 13 June 1997 and there are no children of the family. In 1998, the parties purchased a unit as joint tenant under the Home Ownership Scheme which is the former matrimonial home (“the former matrimonial home”). The parties separated in March 2007. By virtue of the Order made before HHJ I Wong dated 3 March 2021[1], the 4 limited companies under W’s name are post-separation non-matrimonial assets. The former matrimonial home is therefore the only family assets. 3.By virtue of the valuation report prepared by Midland Surveyors who was appointed by the parties as Single Joint Expert, the former matrimonial home as at 1 November 2021 on the basis of sale with the benefit of immediate vacant possession in Open Market and free from all legal encumbrances disregarding all its unauthorized structures, if any, is in the order of HK$9,100,000 but sale in HOS Secondary Market is HK$6,400,000. Legal Principles Applicable to Ancillary Relief claims 4.There is no dispute that in deciding on ancillary relief claims between the parties to the marriage, the court is required by section 7(1) of Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO) to have regard to the conduct and all the circumstances of the case including the following matters:
5.In the case of LKW v DD [2010] 13 HKCFAR 537, the Court of Final Appeal has provided 4 guiding principles: -
6.The Court of Final Appeal has laid down 5 steps in determining ancillary relief applications: -
7.In relation to matrimonial home, Ribeiro PJ said,
Parties’ respective Open Proposals 8.H asked for the former matrimonial home be sold within 3 months from the date of the Decree Absolute at a price either to be agreed between the parties or in accordance with the valuation report and the net proceeds of sale i.e. after deduction of the mortgage redemption money and all costs and expenses incidental to be shared equally between the parties. 9.It is obvious that H seeks to reply on the principle laid down in LKW v DD. 10.W on the other hand proposes that she shall pay HK$800,000 to H within 30 days from the date of the Decree Absolute and subject to the approval of the Housing Authority, H shall transfer all his interest and title in the former matrimonial home to W at nil consideration. 11.W relies on a Minute of Agreed Order (“Draft Minute”) which was filed together with W’s Petition on 30 June 2015. It was however never made as an Order of the Court. 12.In the Draft Minute, it stated,
13.In the Opening Submission, Mr Tam representing W said,
14.W’s case is that H has surrendered all his interests in the former matrimonial home and by virtue of the Draft Minute, she should be entitled to the whole interest thereof. 15.H on the other hand said that when he signed the Draft Minute, he was in a hurry and did not know what he was signing and he further denied that he had abandoned his interest in the former matrimonial home. 16.Ms Lam representing H said in her Opening Submission;
17.Ms Lam helpfully summarised the law in her Opening Submission. She said that the Draft Minute is an agreement between spouses detailing the disposition of properties in the event of marital breakdown. This type of agreement is commonly known as pre-nuptial or post-nuptial agreement. 18.The leading authority is Radmacher v Granatino [2011] AC 534. 19.In Hong Kong, in the case of SPH v SA [2014] 3 HKLRD 497, the Court of Final Appeal cited the following paragraphs with approval;
Issue 20.Have the tests which were laid down in the common law been satisfied so that this Court should give full weight to the Draft Minute? 21.If not, how should the shares of the former matrimonial home be split between the parties? Circumstances leading to H’s signing of the Draft Minute W’s version, H’s reply and my view 22.W said that because of H’s gambling habit, she had lent to H two separate sums of money in the amount of HK$80,000 and HK$150,000 respectively in April and December 1996 so that he could repay his debts. Furthermore, H also told W that he had cash flow problems and therefore he could not repay the mortgage and other expenses. W’s father therefore lent H two equal sums of HK$100,000 in August and December 1999. W further alleged that she had repaid some of the debts to other people on H’s behalf and as all the loan amounts carried interest and H failed to repay either the principal or interest, H therefore owed W, W’s Father and others as follows[2]:- H向W借款記錄(“The Table”)
23.H on the other hand only admitted that W had given him the sum of HK$150,000 but denied that he had ever borrowed the sum of HK$80,000. He further denied that any of the loans carried interests. 24.In his 2nd Affirmation filed on 21 October 2021, H said that as W was only a student when they met each other. On almost all occasions, it was him who brought money to go to Macau for entertainment[3];
25.For my part, H’s version is more credible. W produced a document which is purportedly the loan agreement signed by H on 4 December 1996 setting out (i) the loan amount of HK$150,000; (ii) the repayment method, namely HK$50,000 was to be repaid on 6 December 1996 and the remaining sums were to be repaid by equal monthly instalment of HK$10,000 starting from December 1996. There was another document which was labelled as a Declaration made by H also dated 4 December 1996 stating that H would never be engaged in any gambling activities again. The two documents made no mentioning of any interest. 26.In any event, when W was cross-examined as to the issue, she admitted;
27.As to why her loan to H carried interest, W said in her oral testimony;
28.I do not accept W’s loan to H in the sum of HK$150,000 carried interest. 29.As to the loan of HK$80,000, H denied that he had ever borrowed that. 30.In Court, when W was cross-examined on that, she said;
31.As the burden of proof is on W who has failed to produce any evidence to support her case, I do not accept this loan of HK$80,000. 32.As to the two loans borrowed from W’s father, although H admitted the same, he strongly denied that there was ever mentioned that those loans carried interest. 33.In Court, when W was cross-examined by Ms Lam, she admitted that the two loan agreements with the wordings interests were not there when H signed them. She said;
34.Although W when she gave her oral testimony said that 屋企人借錢冇寫(interest) 係正常, I do not believe her evidence. If this is the case, why was there ‘black and white loan agreements’ in the first place. It is also my view that for close relatives, HK$1,500 per month for the principal loan amount of HK$100,000 is on very high side. 35.From the table above[9], the two sums of HK$100,000 borrowed from W’s father carried interests in the sums of HK$402,000 and HK$396,000 respectively. As W admitted in her oral testimony that the loans were borrowed mainly for mortgage repayments of the former matrimonial home, it is my view that the alleged interest rate plus the mortgage loan interest would have made the monthly interest rate very high indeed. I do not accept that the two loans from W’s father carried any interests. 36.As to the other loans, I do not find them of any relevance to the present dispute. However, I would just briefly cover them for the sake of completeness. 37.As to the repayment of loan in the sum of HK$40,000 to Jenny under Item 3 of the Table, H’s case is that he had already paid W cash in the sum of HK$50,000 on 11 April 2006[10] whereas W denied and she queried why H did not pay to Jenny direct in that case. 38.As to the repayment of the hire purchase of the vehicle under Item 4 of the Table, it is H’s case that it was purchased for the parties to use during the marriage but in view of his financial difficulties, he could not afford to pay for the hire purchase. W on the other hand insisted that the car was purchased for H’s business. 39.For my part, I make no findings as to who was telling the truth but I notice that there has not been any evidence produced that the two loans carried 8% interest. 40.As to the repayment of the loan to Angle Chan under Item 5 of the Table, W when cross examined by Ms Lam said,
41.Again, I find no evidence that the loan carried interest and I therefore do not accept any of the interest payments. 42.As to the loan to 王X, W when cross-examined by Ms Lam said,
43.In view of W’s oral evidence, I do not accept that the loan (if any) carried interest as alleged. Furthermore, I also do not accept that the payments to any of the third parties by W were the loans repaid by W on behalf of H. 44.W said in her affirmation because of H’s financial difficulties, he told W that[11],
45.H on the other hand said[12]
46.In my view, there is no dispute that H’s parents had been assisting in the repayment of the mortgage of the former matrimonial home. According to W’s Affirmation filed on 10 August 2021, she said[13];
47.According to H however, he said that his parents had been burning up all their savings in order to help them. 48.In my view, if the parents had been assisting the repayment of mortgage whether by way of a loan as alleged by W or by way of love and affection as alleged by H at least up to October 2010 (in accordance with W’s version), I simply do not accept that H would have abandoned his interests in the former matrimonial home in 2007. 49.As to whether H has entered the Draft Minute under free will and with proper legal advice, the obvious answer must be no. 50.Both parties had no dispute that it was H’s mother who gave the divorce paper to H for his signature. H’s mother in her Affirmation dated 5 August 2021 said[14],
51.Mr Tam in his Closing Submission submitted that,
52.With respect, I disagree. From the Draft Minute, one of the signatures H put down was underneath the following clause: -
53.It is not in dispute that H did not sign the Draft Minute in Messrs Yip, Tse & Tang (“the law firm”). The Clause therefore is an incorrect statement and yet H still signed on it. It is my view therefore that H’s version is credible. 54.In any event, it is not in dispute that the only family asset is the former matrimonial home. If H were to transfer his interest wholly to W, why does W still want HK$1 nominal maintenance given that H and W were only 45 and 42 years of age respectively with no children. 55.I therefore accept that H did not know what he was signing. 56.Mr Tam also submitted,
57.With respect, where the Draft Minute only contains 3 pages and H’s mother got mixed up as to which page is the signature page reinforced my view that H’s mother did not look into details as to the Draft Minute. 58.In the light of the reasons which I have given, this Court would not give any weight to the Draft Minute. How should the share of the former matrimonial home be split between the parties? 59.Mr Tam submitted in his Closing Submission,
60.I agree. However, since the purchase of the former matrimonial home from March 1999 up to the end of 2006, H was the one who was responsible for mortgage repayment and most of the household and family expenses. 61.As from 2007 onwards, Ms Lam in her Closing Submission submitted,
62.I agree in its entirety. 63.Ms Lam also submitted in her Closing Submission,
64.I share her view. 65.Mr Tam in his Closing Submission submitted,
66.For my part, I disagree with the argument which is purely hypothetical. The fact is that the former matrimonial home has not been sold. 67.Although W has been solely responsible for mortgage repayments since January 2011 which is around 11 years, H together with his parents had been responsible for most of the mortgage repayments from 1996 to 2010 which was 14 years. Furthermore, W has been living in the former matrimonial home rent-free up to now. 68.It is my view that both parties together with the support of the respective parents had made contributions to the former matrimonial home. 69.In the light of the reasons that I have given, I see no reason why I shall depart from the principle laid down in LKW v DD. 70.Therefore, the former matrimonial home is to be sold within 3 months from the date of the Decree Absolute at a price to be agreed between the parties or in accordance with the valuation report and the net proceeds of sale after deduction of the mortgage redemption money and all costs and expenses incidental to be divided equally between the parties. Costs 71.As I am in favour of H, costs should follow the event. Order 72.(i) The former matrimonial home be sold within 3 months from the date of the Decree Absolute at a price to be agreed and if not in accordance with the valuation report and the net proceeds of sale after deduction of the mortgage redemption money and all costs of and expenses incidental thereof to be divided equally between the parties; (ii) There be liberty to apply; (iii) The Petitioner do bear the costs of and incidental to these proceedings including all costs reserved with Certificate of Counsel, to be taxed if not agreed.
Mr Wilson Tam, instructed by Tang, Wong & Cheung for the Petitioner Ms Yanky Lam, instructed by Chan Chun Tin & Co. for the Respondent [1] Bundle 3 Page 651 [2] Bundle Part 1 Pages 108-155 to 108-156 [3] Bundle Part III Page 680-12 [4] Page 13 of the Transcript [5] Page 12 of the Transcript [6] Bundle Page 108-156 [7] Page 13 of the Transcript [8] Page 19 of the Transcript [9] Paragraph 22 Supra [10] Bundle 1 Page 108-162 [11] Bundle 3 Page 675 [12] Bundle 3 Page 680-15 [13] Bundle 3 Page 675 [14] Bundle 3 Page 667 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||