Ccl v. Hyl

FCMC 10611/2020

[2025] HKFC 120

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 10611 OF 2020

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Decision

(Variation of Costs Order Nisi, Stay of Execution &
Application for Leave to Appeal)

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INTRODUCTION

1.On 18 December 2024, I handed down the judgment for ancillary relief of this petition (“the Judgment”).

2.By a summons dated 2 January 2025, the Respondent wife (“W”) applies for variation of costs order nisi of the Judgment. By 2 other summonses filed on 15 January 2025, the W further applies for a stay of execution and for leave to appeal against the Judgment.

3.The Petitioner husband (“H”) was represented in the ancillary relief trial, whereas the W, has acted in person.

The Judgment

4.At time of ancillary relief trial, the H and the W were in their 50s and 60s. They had a long marriage and an adult child studying in Australia (“the Child”). Before separation, both of them were insurance agents working in the same company. During that time, the W being the supervisor of the H, had earned a lot more than him. However, the H became unemployed at time of ancillary relief trial.

5.The majority of the family assets are landed properties and cash values of insurance policies, which are held in the W’s name. The matrimonial pot was found to worth $12,427,891.74.

6.In the ancillary relief order made in the Judgment, I find the W shall be responsible, as she has been doing, for paying off child maintenance and education expenses. I ordered on a clean break basis, after a deduction of $1,326,100 for child maintenance and future education expenses from the matrimonial pot, the value of the remaining family assets to be shared equally. I ordered the W to pay the sum of $5,357,977.76 to the H 56 days after the pronouncement of the decree absolute (“the AR Order”).

7.In terms of costs, I ordered, the W to pay the H, on a nisi basis, 75% of the H’s costs of the ancillary relief proceedings, including all costs reserved, with certificate for counsel, to be taxed if not agreed (“the Costs Order Nisi”).

I.  VARIATION OF COSTS ORDER NISI

8.The W is not contended with the Costs Order Nisi, she applies to vary the said order that the H to pay all costs of the ancillary relief proceedings, she argues

(i)  the AR Order is close to her offers contained in her Statement of Open Proposal dated 1 March 2022 made to the H for the FDR hearing (“the 1 March 2022 Proposal”) and ; her letter dated 10 March 2022 on a without prejudice (save to costs) basis (“the 10 March 2022 Letter”);

(ii)  the manner in which trial was conducted by the H’s legal representatives was unreasonable; and

(iii)  the H failed in issues raised in the ancillary relief trial.

9.Ms. Ling, counsel for the H submitted the Costs Order Nisi is fair result of the ancillary relief trial, no variation is warranted. She opposed by submitting the following: -

(i)  the AR Order did not meet the W’s offer(s).

(ii)  the W’s unreasonable conduct outweighed the H’s conduct; and

(iii)  the trial was conducted by H’s legal representative was proper.

The Legal Principles

10.The starting point of general principles of ordering costs in family proceedings remains to be costs follow the event. (see Order 62, rule 3(2) of the Rules of the High Court, Cap 4A (“the RHC”).

11.When decision on costs remains to be discretionary, Order 62 rule 4 of the RHC comes into play. The Court must bear in mind the underlying objectives in Order 1A, rule 1 of the RHC. Special features such as payment into Court, written offers on settlement on a “without prejudice save as to costs” basis, conduct of parties will be considered. (see Order 62, rule 5(1) (aa) to (g) of the RHC)

12.In Gojkovic v Gojkovic [1991] 2 FLR 233 at 238-239, Butler-Sloss LJ stated,

“There are many reasons which may affect the court in considering costs, such as culpability in the conduct of the litigation: for instance (as I have already indicated earlier) material non-disclosure of documents. Delay or excessive zeal in seeking disclosure are other examples. The absence of an offer or of a counter-offer may well be reflected in costs – or an offer made too late to be effective. ... It would, however, be inappropriate, and indeed unhelpful, to seek to enumerate and possibly be thought to constrain in any way, that wide exercise of discretion. But the starting point in a case where there has been an offer is that, prima facie, if the application receives no more or less than the offer made, she/he is at risk not only of not being awarded costs, but also of paying the costs of the other party after communication of the offer and a reasonable time to consider it. That seems clear from the decided cases and is in accord with the Rules of the Supreme Court and the County Court Rules 1981 requiring the court to have regard to the offer. I cannot, for my part, see why there is any difference in principle between the position of a party who fails to obtain an order equal to the offer made and pays the costs, and a party who fails by the offer to meet the award made by the court. In the latter case prima facie costs should follow the event, as they would do in a payment into court, with the proviso that other factors in the Family Division may alter that prima facie position”.

13.It was further elaborated in SSLT v. SMFC [2020] HKFC 42, HHJ Ivan Wong stated,

“23. Thus, the court has full power to determine by whom and to what extent the costs are to be paid. The discretion of the court is much wider in family cases and the starting point is more easily displaced than in any other civil proceedings. In TL v SN, CACV 196/2009 (19 October 2010), Kwan JA, in her unanimous judgment for the Court of Appeal, reaffirmed that in matrimonial cases, as in other cases, costs should normally follow the event. This approach was reaffirmed in Z v X & C, CACV 166/2011 (8 March 2013) where Cheung JA said that costs should follow the event although because of the special dynamics of family litigation, the discretion may be broader than in civil matters generally: at [10].”

The issues

14.In light of the above legal principles, the Court has to determine, in sequence:

(i)  who is the successful party in the ancillary relief proceedings;

(ii)  if the H is the successful party, would there be any impact on the Costs Order Nisi in light of the 1 March 2022 Proposal and the 10 March 2022 Letter;

(iii)  whether the manner in which the H’s legal representative to conduct the trial has an impact on the Costs Order Nisi; and

(iv)  whether the failed issues of the H justify the Court in varying the Costs Order Nisi.

Who is the successful party?

15.The H claims ancillary relief against W. Without doing it formally, the W had once indicated prior to the beginning of the trial to claim ancillary relief of child maintenance from the H at $20,000 per month. She also claims approximately $9 million “compensation” from H. Obviously, H succeeded in obtaining a lump sum award after trial. The W’s claims were dismissed. In other words, the H is the successful party.

Whether the W’s offers have an impact on costs

16.The parties relied on their offer(s) made for the FDR, I take there was consent of parties to admit those offers in evidence adduced in that hearing.

17.There are various without prejudice proposals and correspondence between the parties. The W begins with her 1^st offer contained in the 1 March 2022 Proposal which is the proposal made during the financial dispute resolution:

(i)  The W to sell Greenwood Terrance（康翠臺） no less than $7 million, the net proceeds less outstanding mortgage sum and costs to be shared between the parties equally.

(ii)  The W shall pay for the maintenance and education expenses of the child.

(iii)  There be a clean break between the parties and there be no periodic monthly maintenance between them.

18.There was a slight change of the W’s proposal in the 10 March 2022 Letter, which reads,

(i)  Greenwood Terrace which is currently worth around $4.8 million with no outstanding mortgage to be sold with net proceeds of sale to the H;

(ii)  the W shall keep her Taikooshing property（漢宮閣） and her mainland property; and

(iii)  the W shall pay child maintenance and education expenses of the Child.

19.The H rejected both offers. Such sum offered turned out to be lower than the lump sum awarded after trial. It is the W’s submissions, notwithstanding this, the Court should exercise discretion to order costs the H to pay the W’s costs of the ancillary relief proceedings for sole reason that the W’s offer of $4.8 million (in the 10 March 2022 Letter) was seemingly close to the lump sum order of $5,357,977.76. Alternatively, Mr. Ma, counsel for the W, stated if the W should bear some costs of the ancillary relief proceedings, an order that no order as to costs is appropriate.

20.To substantiate the W’s argument, she criticizes the H made no counteroffer. On this point, the H explained by exhibiting various without prejudice letters in his affirmation in opposition. He rejected the offer mainly because of the W’s failure to disclose their family assets on a full and frank basis, making him impossible to formulate a counteroffer. The H replied to the W’s offer(s) as follows:

(i)  In the H’s Open Proposal dated 25 February 2022 made for the FDR hearing on 4 March 2022, he offered to sell all landed properties, namely Greenwood Terrace, Taikooshing Property and one mainland property, proceeds to be shared equally. The H estimated the aggregate value of the said 3 properties to be $20,000,000 plus RMB1.5 million. Both parties to share the child maintenance and future education expenses.

(ii)  On 14 April 2022, the H rejected W’s offer as per the 10 March 2022 Letter because of the W’s failure to make full and frank disclosure of the family assets.

21.Having considered the above, I am not persuaded the W’s argument can stand. I accept the H’s is unable to make a constructive offer due to the W’s non-disclosure of family assets. This is one of my finding in the Judgement. (See paragraphs 47 – 49 of the Judgment)

22.After all, the W’s offers did not exceed the ancillary relief award, the difference between the W’s best offer and the ancillary relief award is almost $500,000, which is not a trivial amount.

23.Mr. Ma then cited one relevant sentence in LWL v. LMF (FCMC 14442/2012, 4 November 2015), DDJ Ivan Wong (as he then was) to support his submission that the H should pay at least some costs. In this case, DDJ Ivan Wong (as he then was) said in paragraph 82 thereof,

“82. I have reached the conclusion that R was more successful in the trial, that P’s failure to give a full and frank disclosure of her financial situation is a relevant factor, that P’s failure to response and to attempt to negotiate is also a relevant factor and that what P now obtains under the Judgment is very close to R’s 2^nd Proposal. All these point to the direction that R should have the costs, at least in part…..”

24.However, Mr. Ma omitted the entire facts and results of LWL v. LMF [supra], which can be distinguished from the present case. In that case, both the petitioner and the respondent had their own ancillary relief claims, namely sale of property and child maintenance and of which they have each succeeded in part. The Court ordered no order as to costs in the judgment. It was subsequently varied to the extent that the respondent do have half costs of the ancillary relief trial.

25.In the present case, literally, H succeeded in his ancillary relief claim while the W’s claim was wholly dismissed. In other words, aside from the H’s ancillary relief claim not being awarded in full, the H is still the successful party.

26.Secondly, it was decided in LWL v. LMF [supra] quoting Gojkovic v Gojkovic [supra] at paragraph 59B/D, Butler-Sloss LJ said, the preconditions of exercising discretion on costs in a Calderbank offer situation is that both parties must make full and frank disclosure of all relevant assets, and put their cards on the table. Unfortunately, this is not the case here. The H has validly rejected the W’s offer due to her non-disclosure of family assets. This is in line with my factual findings in the Judgment[1] that the W has failed to disclose and had concealed the existence of the family assets. The H is in no way to blame for not making a valid counteroffer.

The manner to conduct trial by the H’s legal representatives

27.The W alleged the H’s legal team shall be responsible for costs of the ancillary relief proceedings. This is because, pursuant to the Order made by DDJ KK Pang (as the then was) dated 24 July 2023, the ancillary relief trial was originally fixed for 4 days. It turned out the trial took place for a period of 5 days.

28.I do not accept the W’s allegation, while the W continues to blame the manner in which the H’s legal representatives have conducted the ancillary relief trial, it is worth mentioning that in fact the W herself has failed to testify properly during cross examination and has ended up in a situation close to wrangling with Ms. Ling. The W had lingered on evidence which was unrelated to the ancillary relief proceedings. Most of the W’s answers to Ms. Ling’s questions were repetitive, long-winded and were not on point. If the manner of trial is to be canvassed, I find the W is also responsible for prolonging the trial.

29.The repetition of the W’s submissions on how the trial has been conducted by H’s legal representatives will not be further addressed, as these issues have been covered in the discussions above.

The H’s failed issues

30.Mr. Ma has misunderstood the principle of “issue – based” approach in exercising discretion on costs. This has been well articulated in a matrimonial case in KJ v. KMLM (HCMC 4 of 2010, 21 May 2014), To J (as he then was), he particularly stated the issue-based approach in paragraphs 17 – 18 thereof. I summarize as follows:

(i)  The starting point of costs to following an event does not cease to apply because the successful party raises issues or makes allegations on which they fail; however, if this has caused a significant increase in the length or costs of the proceedings he may be deprived all or part of his costs.

(ii)  After CJR, the Court is more prepared to take an issue-based approach.

(iii)  It is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs of a particular issue on which he has failed.

(iv)  Not it is necessary to show that the successful party has deliberately wasted time and costs.

(v)  The costs need not be assessed with precision. It suffices if the Court can provide an estimate of the proportion of these costs.

(vi)  A party may be deprived of part of his costs on the failed issues even if such costs overlap with the succeeded issues.

31.In a more recent Court of Appeal judgment Momin Lok v. Hospital Authority (CACV 236/2020, [2021] HKCA 1319), Hon G Lam JA stated in approach in awarding costs on an issue-based approach:

“10. On the other hand, we bear in mind that an issue‑based costs order must not be so readily made as to undermine the utility of the general rule that costs follow the event and to lead to the proliferation of unwarranted costs disputes. The question of costs is one that ultimately depends heavily on the facts and circumstances of each case. As Bokhary PJ, giving the judgment on costs of the Court of Final Appeal in Commissioner of Inland Revenue v Hongkong International Terminals Ltd [2014] 4 HKLRD 412, stated:

“ There is a discretion in the court to deprive a successful party of the whole or part of his costs because he had caused a significant increase in the length or costs of the proceedings by raising issues on which he did not succeed. That can be done even if it was not unreasonable to have raised those issues. Whether or not it should be done depends on all the circumstances. This discretion exists for the purpose of avoiding the rigour of too inflexible an application of the rule that costs generally follow the event. It is to be approached with due circumspection so as not to undermine the utility of that general rule.””

32.What the W attempted to argue is that the Court did not find the cash value of the W’s insurance policies is as high as or over $1 million. In the Judgment, only a lesser sum of $250,000 be added back to the matrimonial pot[2].

33.I am not with the W. While it is true that the H has spent considerable time in dealing with the value of insurance policies held by the W, it is evident this effort stemmed from the W’s non-disclosure of value of those assets. Most of the evidence on this issue was elicited at trial. During cross examination, the W has testified on the value of the insurance policies and whereabouts of the cash redeemed from those policies. I again emphasize during cross examination, Ms. Ling had encountered difficulties when the W did not answer the questions directly on point, and only through my investigation, the issues were made clear.

34.In this regard, I do not see the H has acted unreasonably or improperly in obtaining evidence on the value of the W’s insurance policies, he did not waste time to do so. Even if the issue-based approach is to be adopted here in the post CJR era, the H should not be deprived of his costs when he is the successful party. In other words, costs to follow the event is appropriate.

Conclusion

35.The Court is empowered with the discretion to award costs. Bearing in mind the difference between the H’s open offer at trial and the amount of final award, it is pertinent to award 75% of the costs to the H. I do not see the W is able to justify her application to vary the Costs Order Nisi to either the H to pay her costs or no order as to costs. I conclude by ordering the Costs Order Nisi to be made absolute. The W’s summons filed on 2 January 2025 be dismissed. Costs shall follow the event, the H’s costs of the said summons shall be paid by the W, with certificate for counsel, to be taxed if not agreed. The H’s costs be taxed in accordance with the Legal Aid Regulations.

II.  LEAVE TO APPEAL

36.The W has raised a total of 12 grounds of appeal in her Draft Notice of Appeal.

37.Section 63A(2) of the District Court Ordinance, Cap 336 states that leave to appeal shall not be granted unless the intended appeal has a reasonable prospect of success or there is some other reason in the interests of justice that the appeal should be heard. A reasonable prospect of success means an appeal with prospects that are more than fanciful but which do not need to be shown to be probable. (See SMSE v. KL [2009] 4 HKLRD 125).

Ground 1 – delay of proceedings

38.The W submitted a 4-day trial was fixed to commence on 22 August 2023, which was re-fixed to commence on 30 November 2023. Upon revisiting the Court notes, by an order dated 24 July 2023 made by DDJ KK Pang (as he then was), the trial date was re-fixed with comprehensive case management directions, including submission of valuation reports of landed properties, to a 3^rd Pre Trial Review on 6 October 2023.

39.The trial was heard by me on 30 November 2023, I was granted sick leave on that day. The trial was unable to finish within remaining 3 days, I further set part heard dates upon consultation of counsel’s diary on 2 February 2024, 5 February 2024 and 29 April 2024.

40.The time of lodging written closing submissions was fixed in light of the volume of evidence at trial.

41.There is no delay of the ancillary relief proceedings. Ground 1 of the Draft Notice of Appeal has no merit.

Ground 2 – the W’s contribution to the family &

Ground 3 – the H’s unemployment

42.The W labelled herself as a responsible mother, contributed to the family substantially as opposed to the H, who did not work diligently. The W stated I have erred by not taking into account the H’s unemployment since January 2021. During that period, the W shouldered all expenses of the family and the educational expenses of the Child. In fact, both grounds relate to the W’s aspersions about the H’s unemployment during marriage and after separation.

43.The W submitted I have erred by not deducting the H’s entitlement on the ancillary relief by paying due regard to the fact that the H kept himself out of a job in his 50s. The W submitted that I should have deviated from the equal sharing principle as stated in Step 5 of LKW v. DD (2010) 13 HKCFAR 537 by dismissing the H’s ancillary relief claim or alternatively ought to have awarded at least 60% to 70% of the Taikooshing Property to her.

44.Mr. Ma cited Gray v. Work [2018] Fam 35, [2017] EWCA Civ 270 to support this ground of appeal. In this case, the husband had earned alarmingly higher income (around US$225m at time of ancillary relief trial) than the wife. With substantial scale of resources he had applied to the family, the husband appealed the ancillary relief order of an equal division of matrimonial assets, asserting that he should be entitled to a share of the matrimonial assets greater than the wife, who had only able earned modest income. The husband sought a 61% share of division of assets. The Court of Appeal dismissed the husband’s appeal and had decided that the approach of equal division of matrimonial assets is in line with the landmark cases McFarlane v. McFarlane [2006] 1 FLR 1186, HL(E), Miller v. Miller [2006] 2 AC 618 and Charman v. Charman ([2007] 1 FLR 1246, CA).

45.Briefly, the judgment of Holman J decided:

(i)  With reference to McFarlane v. McFarlane [supra], Miller v. Miller [supra] and Charman v. Charman [supra], that a special contribution made by one party can have an impact on the court’s exercise of its distributive powers. (paragraph 15 of the judgment);

(ii)  To assess whether the wife’s contribution was “unmatched” with the husband, the Court stated that her decision to move to live with the husband in Japan, away from hometown is a significant contribution. (paragraph 20 of the judgment)

(iii)  In this context, the husband had not established “an unmatched special contribution of the kind and to the extent that the authorities require.” (paragraph 22 of the judgment).

46.Ironically, the W relied on an authority that is against her and if not, of no assistance to her. Sir Terence Etherton MR and King LJ of the Court of Appeal upheld the judgment of Holman J, that the husband and wife were entitled to an equal share of the marital wealth. They made clear the following principles:

“The argument that recognition of a special contribution by a husband by virtue of a significant financial contribution risks commodifying the domestic contribution of a wife, that comparing the value of their contributions is comparing apples with pears, that what is relevant is the respective contributions of the husband and wife to the welfare of the family, and that fixing the level at which a financial contribution becomes a special contribution purely arbitrary, as is the consequential unequal division of the matrimonial property.” (paragraph 86 of the judgment)

47.The said Court of Appeal went on to say, the doctrine of special contribution is to

“leave scope for an unequal division if there is good reason why such is required to achieve a fair outcome. We emphasise the need for a good reason to signify that it must be sufficiently substantial if it is not to undermine principles be set out in the McFarlane case.” (paragraph 89 of the judgment)

“If the concept was being applied more broadly, there would clearly be a risk that it would be discriminatory.” (paragraph 93 of the judgment)

“Clearly, the last stage, when the judge decides the actual division of the marital property, is discretionary. Special contribution itself comprises in part findings of fact, as to what contributions each party has made, and in part a value judgment, namely whether one party has made such an exceptional contribution that the disparity in the parties’ respective contributions makes it inequitable to disregard the former when determining how to exercise the distributive powers under the 1973 Act. It could also be said that the latter is in part discretionary because the weight that a trial judge decides to place on the parties’ respective contributions is part of the discretionary process.” (paragraph 105 of the judgment) [emphasis added]

48.The facts of the H and the W are largely different from those in Gray v. Work, the W was only the supervisor of the H when they were working in the same insurance company. I agree the W, as a career minded person, was more capable than the H. However, no “unmatched contribution” had ever existed. In my Judgment, I have made a finding that the H’s prolonged unemployment is not acceptable and had concluded that the H has earning capacity to sustain himself (see paragraphs 42 and 117(a) of the Judgment).

49.In other words, Gray v. Work has no application here and this ground of appeal is unmeritorious.

Ground 4 – H’s betting account with Hong Kong Jockey Club

50.The W submitted I have erred by not taking into account substantive sums that have been deposited to and withdrawn from the H’s betting account with the Hong Kong Jockey Club from January 2021 to December 2022. The minimal amount left in with the said account does not reflect the true financial position of the H, his reckless gambling conduct justified the Court to draw adverse inference against him.

51.Mr. Ma submitted, the Court is duty bound to investigate the H’s extensive betting behaviour which may have an impact on the depletion of family assets. The H has continued to gamble via the Hong Kong Jockey Club betting account with at least $565,964 deposited to the account. The W said I shall draw inference against the H that he has another source of income and to add back $565,964 to the family pot.

52.The W had without leave of Court, filed an affirmation on 30 January 2024 (after the 2^nd day of trial) to tender further evidence on the gambling patterns of the H. According to Court record, no affirmation of service of the same has been filed. The same affirmation, which contains evidence of the H’s gambling habits was not considered.

53.This issue was not thoroughly raised by the W at trial when she has acted in person. In fact, the parties have over 4,000 pages of exhibits submitted for this ancillary relief proceeding. Mr. Ma submitted certain pages of the trial bundle that were suspicious of extensive gambling on the part of the H which I have failed to consider.

54.The minimal amount left in the Hong Kong Jockey Club betting account was stated in the H’s updated Form E on 11 July 2023, which indicated a minimal balance of $345.30. During cross examination, the W focused on expressing her grievances against the H without asking relevant questions sensibly. The W focused solely on the H’s conduct, including his extramarital affairs and how the H has caused her suffering from a sexually transmitted disease. When the Court has a duty to investigate, I do not see the inquisitorial role should be expanded in a way to scrutinize every entry of an exhibit when a party has failed to identify the issues for ancillary relief disputes.

55.Even if I have erred in not considering the same, the aggregate gambling sum alleged is $565,964, this is not a single bet but an accumulation of a continuing sum. In comparison to the W, she has been more flagrant in incurring a loss $1.8 million in one single stock trade. After careful consideration and applying the principles in LCC v LTLA (CACV 281/2022, [2024] HKCA406), I did not add back the said $1.8 million loss incurred by the W. By the same token, if there had been loss of $565,964 by the H, it should not be added back as well.

56.This ground is also unmeritorious.

Ground 5 – adjustment made to MPF balance

57.The W submitted I have erred by not discounting her MPF cash value when she was aged 62 at time of the ancillary relief trial. In SSLT v. SMFC [2019] HKFC 250, the Court discounted 50% for a 54-year old wife and 30% discount for a 62-year old husband.

58.In a Court of Appeal application for leave to appeal decision, WMH v. LCY (Ancillary Relief) [2025] HKCA 92, Chow JA stated in his judgment handed down on 24 January 2025 the following regarding the discount of MPF balance in an ancillary relief proceedings:

“36. We accept, as a matter of principle, that for the purpose of determining the value of the matrimonial pot, a discount may appropriately be applied to an asset which cannot be immediately realised for cash or one that is not readily realisable or transferrable until much later. However, whether a discount should be given, and what discount rate should be applied, must depend on the circumstances, including the nature of the asset in question and the period of time that must or will likely elapse before the asset can be realised. In this case, there was some evidence concerning the normal retirement age of a police officer. We doubt whether actuarial evidence is necessarily required to determine the appropriate discount that should be applied in respect of the parties’ MPFs. However, there must be some proper basis to substantiate the proposed discount rates. H has not given any basis for his proposed discount rates (namely, 50% in the case of his MPF and 60% in the case of W’s MPF). Further, issues such as the possibility of early/delayed retirement for a police officer, the circumstances where the MPF might be withdrawn early, and the appropriate discount rate(s) were not investigated or argued at all at the trial. Also, as mentioned in the Leave Decision (at §§50 and 51), no issue was raised by H at the trial concerning the value of the MPFs.” [emphasis added]

59.This is precisely the situation here. The W did not address issue of the discount rate of MPF value at trial. I repeat, the W had spent most of her time airing grievances against the H during the trial, discussing what she wanted, without actually focusing on the discounted rates of MPF in the ancillary relief trial.

60.The reasons of not discounting the respective MPF values are well stated in paragraph 53 of the Judgment. At time of the ancillary relief trial, the H was 54 whereas the W was 62. I found the W is able to retrieve MPF value in 3 years’ time so I did not discount her value. The H who is 8 years younger than the W should be entitled to a discounted value instead. However, the H has already retrieved $215,241 from his MPF account in 2021 which has an effect of discounting and thus no further discount should be rendered.

61.I do not consider this ground to be reasonably arguable, or have any reasonable prospect of success.

Ground 6 – Son’s further education

62.The W submitted I have erred by not accepting the Child’s future education needs for furthering his Master degree in a tertiary institution in the sum of $2.05 million.

63.There is no evidence from the W or the Child himself, particularly his ability to gain entrance to a master degree in any tertiary educational institution (see paragraph 113 of the Judgment). In fact, both the W and the Child attempted to conceal the status of his schooling and results of his educational achievements from the H. I do not see there is evidence to support the Child’s ability is sufficient to attain higher education after the completion of his current bachelor degree. What was left behind was the W and the Child’s bare assertion of a bizarre sum of $2.05 million.

64.This ground is unmeritorious as well.

Ground 7 – Value of H’s insurance policies

65.The W submitted I have failed to investigate the value of the H’s 6 insurance policies and did not add back the value to the matrimonial pot.

66.The issue of value of the H’s insurance policies was raised by the W in her written opening submissions and supplemental written opening submissions. The H testified he has no means to pay the premiums of the insurance policies and had only left with him a medical insurance policies with no cash value. I made a finding according in paragraph 92 of the Judgment.

67.This ground does not have any real prospect of success.

Ground 8 – Section 7(1)(a) to 7(1)(d) of the MPPO, Cap 192

68.The W submitted I have erred in awarding a lump sum payment to the H when (i) considering her age and her lack of savings to support herself, she should have allowed to live in the Taikooshing Property for the rest of her life; and (ii) the Child’s accommodation needs after completion of his studies abroad.

69.This point has been well covered in paragraphs 163 – 168 of the Judgment.

70.The W further submitted “new evidence” that, according to the Government’s statistics, the life expectancy of a female was 88.1 years in 2023, I have erred in concluding the W has sufficient assets to support her living during her lifetime. At the hearing, Mr. Ma conceded this point and withdrew the “new evidence”.

71.This ground does not have any real prospect of success.

Ground 9 – W could not present her case in Court

72.The W submitted I have erred by not allowing her to present her case fairly at trial due to interruptions from the bench and by not allowing her to give evidence relating to issues/matters that she considered relevant and important.

73.According to paragraph 7 of the Order of HHJ KK Pang (as he then was) dated 21 November 2022, the parties were ordered, unless directed otherwise, all affirmations, documents and witness statements be adopted as the evidence in chief of the H, the W and their witnesses. Apart from answering questions during cross examination, no party will be allowed to “present their case” freely at trial.

74.Furthermore, the W said she has been given no chance to reply to the “new evidence” submitted by the H in his reply to the W’s Written Closing Submissions.

75.Any new evidence submitted after trial has not been considered.

76.This ground has no prospect of success and is unmeritorious.

Ground 10 – Court’s quasi-inquisitorial role

77.The W submitted I have failed to take a quasi-inquisitorial role as in Parra v. Parra [2003] 1 FLR 942 (at paragraph 22) and LKW v. DD [supra] at paragraph 69. The precise paragraph appears as follows:

“69. The essence of this fourth principle is reflected in Thorpe LJ’s illuminating comment in Parra v Parra:[3]

“... the outcome of ancillary relief cases depends upon the exercise of a singularly broad judgment that obviates the need for the investigation of minute detail and equally the need to make findings on minor issues in dispute. The judicial task is very different from the task of the judge in the civil justice system whose obligation is to make findings on all issues in dispute relevant to outcome. The quasi-inquisitorial role of the judge in ancillary relief litigation obliges him to investigate issues which he considers relevant to outcome even if not advanced by either party. Equally he is not bound to adopt a conclusion upon which the parties have agreed. But this independence must be matched by an obligation to eschew over-elaboration and to endeavour to paint the canvas of his judgment with a broad brush rather than with a fine sable. Judgments in this field need to be simple in structure and simply explained.” [emphasis added]

78.This ground is too generic. Applying the principles above, all issues the Court considered relevant have been canvassed.

79.This ground is also unmeritorious.

Ground 11 – New valuation of Taikooshing Property

80.The W submitted, due to the plunging property market prices, the valuation report of Centaline Surveyors dated 25 September 2023 which the Taikooshing Property be valued at $11,500,000 was inaccurate. She asserted the current value of the Taikooshing Property should fall within the range of $8,510,000 to $8,630,000 at time of filing her application for leave to appeal.

81.In WMH v. LCY (Ancillary Relief) [supra], Chow JA granted leave to appeal on this ground (appeal proper not yet heard). Briefly, the last day of ancillary relief trial was 30 June 2022. An issue of fluctuation or volatility of the property market was raised at trial. In response to this, the trial judge, HHJ G. Own, invited parties to agree on the updated property value by letter after trial and of which was lodged on 12 July 2022. However, the husband (the appellant) claimed there had been further significant downward adjustment in value of landed properties from 12 July 2022 until handing down of judgment on 15 March 2024, which is 20 months later. He applied for leave to adduce new evidence.

82.The Hon Chow JA went on to identify 4 features in paragraph 45 of the judgment,

“45. In the present case, the following features seem to us to be significant:

(1) Notwithstanding the parties’ agreement on the revised values of the 4 Properties (as at 30 June 2022) contained in a joint letter to the court dated 12 July 2022 after the conclusion of oral hearing, the evidence now proposed to be adduced by H indicates that there had been further significant downward adjustment to the property values between the date of that letter and the date of the Judgment (15 March 2024), being some 20 months later.

(2) There were materials before the Judge at the trial indicating that that H would not, or might not, be able to pay the lump sum award without selling one or more of the 4 Properties.

(3) There was a significant time gap and/or change in the value of the matrimonial pot between the date of the hearing and the date of the judgment. Although generally, the value of the matrimonial pot in an application for ancillary relief should be assessed as at the date of the hearing, whether there is any scope for modification of this general rule and, if “yes”, how it may be modified in such circumstances is an issue which merits further consideration.

(4) Whether H should reasonably have issued an application to adduce further evidence or make further submissions on the market values of the 4 Properties after the conclusion of the hearing but before the handing down of the Judgment is debatable.”

83.I now turn to the analysis of whether the significant features is comparable to the present case.

84.Firstly, the issue of downward adjustment of property value was not discussed at trial. I adopted the H’s valuation reports commissioned in September 2023 as evidence. The W, in this application, submitted the online valuation of property value of the downward adjusted market price of the Taikooshing Property from 29 April 2024 (the last day of trial) and until 18 December 2024 (the date of the Judgment).

85.Secondly, I found that the W would not or might not be able to pay the lump sum award without selling the Taikooshing Property. (see paragraph 169 of the Judgment.)

86.Thirdly, although there was no significant time gap between the last date of trial and date of judgment, I accept there is a change of value of the matrimonial pot when the value of the Taikooshing Property decreased.

87.Fourthly, the W did not take out an application to adduce further evidence prior to the handing down of the Judgment on 18 December 2024, whether she should have done so is debatable.

88.Following the principles and salient features of WMH v. LCY (Ancillary Relief) [supra], I am satisfied Ground 11 has a reasonable prospect of success and, it is in the interest of justice for an appeal to be heard on issue of valuation of landed properties in ancillary relief trial during a continuing downward-adjusting property market.

Ground 12 – Ancillary Relief - Costs Order Nisi

89.The Wife submitted which I do not accept I have erred in awarding the Husband 75% costs of the ancillary relief proceedings on sole reason that the H is not the successful party. I repeat paragraph 15 above. The H’s claim was successful in obtaining a lump sum order for a lesser amount whereas the W’s claim was dismissed.

90.Again, this ground has no prospect of success.

Conclusion

91.I grant leave to appeal only on Ground 11. Subject to Ground 11, there is no other reason in the interests of justice why the appeal should be heard.

92.On issue of costs, the W has only obtained leave to appeal on 1 out of 12 intended grounds, I order the W to pay 90% of the H’s costs of her summons for leave to appeal filed on 15 January 2025, with certificate for counsel, to be taxed if not agreed. The H’s own costs be taxed in accordance with the Legal Aid Regulations.

III.  STAY OF EXECUTION

93.The W submitted it is unlikely to satisfy the AR Order without putting the Taikooshing Property on sale. If stay of execution is not granted, it will inevitably render the appeal nugatory.

94.It is trite that by filing an application for leave to appeal is not itself a ground of stay of execution. There must be some evidence to support a stay.

95.The relevant legal principle was laid down in Ng Yuk Pui Kelly v. Dung Wan Man & ors (CACV 86 of 2019, [2021] HKCA 134). Hon Lam VP stated in paragraph 8 thereof,

“8. The principles governing an application for stay pending appeal are well settled. They were discussed in Star Play Development Ltd v Bess Fashion Management Co Ltd, [2007] 5 HKC 84. Recently, in Bright Gold Ltd v Mega Well Development Ltd, [2019] HKCA 1440, the applicable legal principles were summarized at [13] as follows:

(a) The applicant must show an arguable ground of appeal (viz. one with reasonable prospect of success) before the discretion to grant stay is engaged, see Star Play paragraph 9(6); Sy Chin Mong Stephen v Lo Shing Kin CACV 45/2013, 13 March 2013;

(b) Even if arguable grounds exist, there must be other circumstances justifying the deprivation of the successful party the fruit of the judgment. Sometimes, the applicant may do so by showing the existence of strong ground of appeal. Sometimes, the applicant may do so by showing that the appeal would be rendered nugatory if no stay is granted. In either case, the court must also have regard to the prejudice that could be suffered by the successful party if a stay is granted. In all cases where the discretion is engaged, ultimately it is a balancing process with common sense; and

(c) In assessing the strength of the appeal for the purpose of a stay application, it is impracticable and undesirable to go deeply into the merits: see Star Play paragraph 9(5). A broad brush approach is called for. Thus, counsel should not attempt to deploy full arguments on law and facts quoting in extenso all the relevant evidence and transcript as if the application for stay is a platform for a rehearsal of the appeal proper. Generally, with the benefit of written skeleton submissions, the court is able to assess whether an appeal has a high prospect of success without lengthy oral submissions from counsel, MKKWH v RKSH CACV 197/2012, 27 February 2013 at [3]. Application for stay of execution should not be a dry run of the appeal, see Ming Hsieh v Xu Zhe [2018] HKCA 390, at [9]. [footnote not included]”

96.Having decided the W is able to demonstrate her intended Ground 11 as an arguable appeal, I grant an order for a stay of execution of the Judgment pending the determination of the appeal proper.

97.I order the costs of the W’s summons filed on 15 January 2025 for stay of execution be in the cause of the appeal. The H’s own costs be taxed in accordance with the Legal Aid Regulations.

Ms. Vickie Ling instructed by Messrs. Lee & Wu, solicitors for the Petitioner

Mr. Billy Ma instructed by Messrs. Ha & Ho for the Respondent (Applicant)