Yiu Yat Hung v. Hung Hiu Hung

HCMC000002/1993

IN THE SUPREME COURT OF HONG KONG

DIVORCE JURISDICTION

SUIT NO. 2 OF 1993

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Coram: The Hon. Mr. Justice Barnett in Chambers

Dates of hearing: 7- 11, 14-18, 21-25 and 28-29 March 1994

Date of judgment: 26 April 1994

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J U D G M E N T

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1. This is an application by the Respondent wife for ancillary relief. By her notice dated 18th November 1992 (the proceedings having commenced in the District Court before transfer to the High Court) she sought for herself, inter alia, orders for periodical payments, secured periodical payments and a lump sum. In the event, the application crystallised as one for a lump sum that would recognise her contribution to the business empire which the Respondent alleges was created by the parties: see Gojkovic v. Gojkovic [1990] 1 FLR 140. Alternatively, a lump sum which will provide for her reasonable needs for the remainder of her life: see Duxbury v. Duxbury [1990] 2 All E.R. 77.

It seems to me that three questions have to be answered.

(i) Is there a business empire capable of producing the substantial sums which the Respondent seeks.

(ii) If so, did the Respondent contribute to that empire in any significant way.

(iii) What are the Respondent's reasonable requirements.

2. These questions are easily stated but far from easy to answer.

3. The marriage was not of long duration. The parties married in Hong Kong on 19th May 1985. Two daughters were born, one on 28th November 1985 and one on 13th June 1988. Both now live with the Petitioner. By mid 1992, the marriage was effectively over. On 26th October 1992, the Petitioner issued his petition based upon the Respondent's unreasonable behaviour. The Respondent answered on 22nd March 1993 and cross petitioned on the basis of the Petitioner's unreasonable behaviour and adultery. On 17th June 1993, the petition was amended by deleting all particulars while the answer and cross petition were amended to rely on adultery alone. The Petitioner having admitted the adultery, a decree nisi was granted that day upon the Respondent's amended cross petition.

4. The Respondent's case is that she began to work for the Petitioner when she left school in 1983, when she was about 18. The Petitioner was then in the timber business in a small way, working from a room within the office premises of another company in International Building. The Respondent said that she threw herself into the running of the office for the Petitioner, attending to all the paper work. With her help, the Petitioner was able to expand into the steel business and other side lines. Such were the profits made from these enterprises that they were able to expand both in Hong Kong and China, particularly in Shenzhen. In Shenzhen, land was acquired and a textile factory built. The businesses have generated profits which have been invested in property in Hong Kong and in land development in China, both in Shenzhen and Shanghai. The development of these flourishing enterprises was in no small measure due to the Respondent's unflagging assistance and support, both in Hong Kong and in China. Although, because of lack of detailed financial information, the value of the various enterprises cannot be accurately assessed, the Respondent asserts that I can confidently assume a value of anything up to $2 billion. She asks for a generous award to reflect her contribution to such an obviously prosperous concern.

5. The Petitioner, while acknowledging that the Respondent must be given reasonable accommodation and money to spend on her living, was adamant that he is no longer a wealthy man. His case is that all the businesses and projects in which he has been involved have failed and that he owes a sum of between HK$100 million and $200 million to the Shenzhen company whose primary asset is the textile factory. His only present source of funds is the various properties purchased in Hong Kong by the parties or their companies from profits generated by the sale in Hong Kong of textiles which came from the Shenzhen factory. The Petitioner asked that most of the proceeds from the sale of those properties should go to Shenzhen. As I understood it, he left it to me to decide how much should go to the Respondent by way of a lump sum.

6. The Petitioner said that he came to Hong Kong from Guangzhou in 1982. He had been at the University in Guangzhou as an assistant professor and resident doctor. He could not continue the practice of medicine in Hong Kong and decided to go into business. He took a temporary job as an office boy and later as salesman in a company trading in paper. After three months, he became deputy manager in the sales department and by hard work became No. I in the sales field. In July 1982, he left that company and with his accumulated savings of HK$20,000 set up a company which relied for its existence upon commission generated by the introduction of buyers and sellers. I have very little information about this company, other than that which I have briefly stated. Very little attention was paid to it in the course of evidence other than, as far as I can see, when Miss Eu who appeared for the Respondent reminded the Petitioner that HK$20,000 had been sufficient for him to get started in business on his own. Nonetheless, I think this business to have been significant. For it seems to me to sum up the Petitioner's real philosophy in business which is to get people or companies together, arrange an agreement in principle for some huge project, such as a power station or steel works in which he or one of his companies would have a part, and then try to arrange the necessary finance to get the project off the ground. For the most part, certainly in later years, finance was not forthcoming. When finance could be arranged however, the success of any project would enable the Petitioner to live comfortably.

7. At all events, from this humble beginning grew, by 1992, a bewildering network of companies in Hong Kong generally known as the Hong Wah Group, and a series of joint-ventures in China, the most important being the textile factory owned by Shenzhen Hong Wah Industrial Holdings Company Limited also known as Shenzhen Hong Wah Industry and Commerce Company Limited. I shall refer to this simply as Shenzhen Hong Wah. What is clear to me is that the growth of the various enterprises largely depended upon the booming economy in Shenzhen, and the Petitioner's considerable network of contacts in China with a variety of businessmen and officials, such as the mayor of Shenzhen.

8. Returning to 1982 when the Petitioner was just setting out on business on his own, first, he participated in a joint-venture to set up a cement factory in Shenzhen. He withdrew at the end of 1983 when competition was very fierce. In the meantime, he had formed a partnership, Asean Timber Company, to supply timber and plywood needed for building in Shenzhen. Soon after, he set up Euro-signal Steel Company Limited to supply steel and building materials to Shenzhen. Both companies prospered until 1986 when, according to the Petitioner, policy in China changed and foreign merchants were no longer allowed to import steel and building materials directly. The purchase of such material by construction companies in China had to be from sources within China.

9. In China, the Petitioner had used Asean Timber to form a joint- venture with a Chinese company, Sun Po Enterprise Company Limited. The joint-venture was called Sun Po Building Materials Company Limited (or Shenzhen Sun Po Building Materials Company Ltd.). That company it seems had imported steel and timber from the Plaintiff's Hong Kong companies, an arrangement that had now come to an end. It made a profit of $1 million in the first 4 months of operation.

10. At the suggestion of a colleague CHONG Wing-man, the Petitioner began to investigate dyeing and printing. He set up Homewell (HK) Dyeing and Printing Factory Company Limited (Homewell) as a vehicle for this and acquired premises in Tsuen Wan. The Petitioner discovered however, that this approach was uneconomic. He needed larger and more modern machinery and larger premises. He looked to Shenzhen where, thanks to his contacts, he set up a joint-venture to acquire land and build a factory. Initially, the partners in the joint-venture were Shenzhen Sha Yu Chong Harbour Area United Developing Company (the Harbour company), in which Sun Po Building Materials had a 25% stake, which took 45%; the Foreign Trade Group which took 25%, and Homewell 30%. The Harbour company provided the land. The size of the land is in dispute but it was certainly substantial and according to the Petitioner initially 60,000 sq. metres. The partners put in US$3 million proportionately. That capital was insufficient and loans from banks in China, eventually totalling RMB110 million, were obtained. The joint-venture was called Shenzhen Hong Wah Dyeing and Printing Factory Company Limited.

11. The factory was completed and trial production began in early 1989. Full production began in mid 1989 which unfortunately coincided with the unhappy events of 4th June. Since then, according to the Petitioner, because other countries closed their markets to China, the textile industry in China and Hong Kong has declined. Many factories in Hong Kong closed and others had their turnover greatly reduced. By 1990, the factory was performing poorly and Sun Po Building Materials was doing no business. The Petitioner decided to merge the two companies and seek public listing in Shenzhen. The new company was Shenzhen Hong Wah. The Harbour Company and Foreign Trade Group withdrew. The principal shareholders in the new company appear to have been the Industrial and Commercial Bank with 32%, Shenzhen Dongguan Special Native Products Company Limited with 20%, Sun Po Enterprise Company with 10 or 15%. and Asean Timber with a small holding. Homewell, the Petitioner's company, retained 30%.

12. A prospectus was issued and can be seen in the Chinese Newspaper coverage which is Exhibit P1. That recorded an asset of HK$100 million, being a debt owed by the Petitioner. The Petitioner could not pay. The public listing failed in the sense that, although subscription had been made by some 10,000 shareholders, the Shenzhen authorities would not and according to the Petitioner still do not allow the shares to be traded on the local exchange. According to the Petitioner, his credit and reputation in Shenzhen being then worth nothing, he caused all his companies to cease business in December 1992 and resigned as chairman of Shenzhen Hong Wah.

13. The apparent collapse of the Petitioner's various enterprises arises, according to the Petitioner, from a curious business arrangement for the marketing of the fabric produced by Shenzhen Hong Wah. The fabric was marketed in Hong Kong by two of the Petitioner's companies, namely, Hong Wah Textile Company Limited and Homewell. These two companies were described as commission agents, so that their only function should have been to dispose of the goods for the best price obtainable and deduct and retain their commission from the proceeds of sale. In fact, the goods must have been sold to the two Hong Kong companies because Hong Wah Textiles at least, in its financial statements, recorded the cost of goods and of sales which in 1993 showed a gross loss. Further, the companies supplied a large quantity of material, such as dyes, to Shenzhen Hong Wah. The debt said to be due from Hong Kong to Shenzhen is a net figure obtained after deducting the cost of material supplied. At all events, the proceeds of sale less commission were not remitted to Shenzhen Hong Wah. Rather they were spent on the acquisition of property in Hong Kong and in supporting a very comfortable life style for the parties.

14. Assuming that the two companies, and to all intents and purposes the companies are the Petitioner, owed money to Shenzhen Hong Wah, the sum due is far from clear. According to a demand dated 30th March 1993 from Shenzhen Hong Wah, the sum was HK$196 million (a later demand puts the sum at over $200 million with interest). According to the draft management accounts for April 1993, Hong Wah Textiles owes HK$148 million. The ledger of that company, however, shows a sum of HK$117 million. Whatever the exact sum, it is not in substantial. The Petitioner explained that it comprises about HK$80 million by way of losses, HK$40- 50 million spent by the Respondent buying properties in Hong Kong and $10 million by way of bad debts.

15. The question then is whether the Petitioner is a debtor to Shenzhen Hong Wah and now reliant upon the helping hand of friends to get by, or is still, as the Respondent asserts, disposed of substantial assets. The answer, I am satisfied, is that the Petitioner is not without assets, but that those assets are nothing like as substantial as the Respondent believes them to be.

16. Central to the Respondent's belief is a declaration made by the Petitioner on 1st October 1992 before a notary public in Hong Kong. The purpose of this declaration was to enable the Petitioner to bring his younger brother, Yiu Yat On, from China to assist him in running his companies. The Petitioner declared:

"After the checking of the auditor, it is estimated that the market value of its assets has already reached two thousand million (two hundred million shares of Hong Kong Dollars ten each)".

17. "Its" refers to Hong Wah (Holdings) Limited which was intended to be the holding company for the Hong Kong activities of the Petitioner's companies. The Petitioner further declared that he would appoint his brother Executive Director of that company and transfer five million shares with the market value of HK$50 million to him. The declaration was supported by a document purporting to be a proof of assets issued by the Petitioner's accountant on 23rd September 1992. This is a statement made by Tam Chuk Ho (Mr. Tam) that:

"According to my enquiries and investigation, the market value of the Hong Wah (Holdings) Limited of Hong Kong owned by Mr. Yiu Yat Hung will exceed HK$2 Billion after the reconstruction, acquisition and amalgamation."

18. Hong Wah Holdings was set up, according to the Petitioner, in about 1988 to hold his other companies. It seems to have held one or two small Hong Wah companies but to have done no real business. Rather, the Petitioner seems to have used it as a figure head and as a negotiating vehicle for his group.

19. Lending a measure of credence to the Petitioner's generous valuation of his companies' assets are a number of other documents. Exhibit P4 is a glossy brochure issued by Hong Wah Holdings in January 1992 and signed by the Petitioner. This records that the company was incorporated in 1986. that its main activities are real estate, finance, dealing in construction materials, textiles and other matters. The turnover at the end of 1991 was $220 million and turnover of $400 million or more appeared to be predicted for 1992. One might be forgiven for thinking that one was looking at an active, diverse and profitable organisation.

20. Exhibit P3 is an equally glossy brochure of Shenzhen Hong Wah which the Petitioner thought was produced in 1991. It records that since its establishment in 1984, its capital fund, i.e. its net assets, is RMB320 million and its profit in 1990 was US$30 million. Again, one might be forgiven for thinking one was contemplating a thriving and profitable industrial undertaking.

21. Exhibit P1 is the prospectus for the proposed listing of Shenzhen Hong Wah. While not portraying the company in such glossy terms as its brochure, it records modest profits and anticipates expansion. It was plainly a document to be taken seriously.

22. Exhibit R16 is entitled "diagnosis of Hong Wah Company" and was prepared by the Petitioner in May 1993. It records the development and potential of Shenzhen Hong Wah and estimates that, if listed, its capitalization would be RMB2.6 billion.

23. Although I by no means accept all the Petitioner's evidence, I do accept his evidence that the brochures were merely for promotional purposes and that the valuation of HK$2 billion offered by the Petitioner and Mr. Tam depended upon the successful implementation of a variety of new projects and the public listing of his companies in Shenzhen and Hong Kong. The Shenzhen listing failed. That speaks for itself. Further, many of the projects which the Petitioner had in mind can only be described as pie in the sky. For example, exhibit R10 is an agreement reached by the Petitioner through Hong Wah Holdings to develop a steel works in Hei Long Jiang so as to increase its turnover by RMB3 billion and produce profits of RMB500 million within 5 years. Capital of RMB200 million was proposed. The undertaking was colossal. It came to nothing because the Petitioner could not raise the necessary finance. It is an example of the sort of deal or project to which I referred earlier when analysing the Petitioner's business philosophy.

24. The Petitioner is a quick thinker and persuasive speaker. He has a wide range of contacts in China, from Deng Xiao Ping's son to officials in various local Government authorities particularly in Shenzhen. By using such contacts and by the outlay of money on promotion and entertainment, the Petitioner was able to persuade local individuals or companies in China to sign agreements or letters of intent for such projects, all of which depended upon his raising capital. Such capital was generally not forthcoming. The projects therefore came to nothing. In point of fact, as the Petitioner said, the Chinese side needed little persuasion to enter such projects because they were all anxious to draw in Hong Kong companies and Hong Kong money.

25. I have no hesitation in rejecting any idea that the Petitioner is a billionaire. Equally, I reject his assertion that he is penniless. When a court is called upon to assess the worth of an individual, whose assets if any are largely tied up in companies controlled by him, it is essential that that individual lays before the court complete and comprehensible financial statements and supporting documents of those companies. Despite repeated requests, this the Petitioner failed to do until Mayo J. made a suspended committal order on 7th January 1994. Since then, the documents and information have trickled in and have continued to do so during the hearing. So the Petitioner got off on the wrong foot.

26. Next, the financial statements and records that have been produced, principally in relation to Hong Wah Textiles, Homewell and Hong Wah Holdings, are confusing and contradictory. The Respondent's accountant has been unable to make a sensible analysis or explanation of them. Miss Ruby Siu, the auditor of these Hong Wah companies and who was responsible for the audited financial statements which have been produced was not able to do much better. Her firm was in fact only engaged in February 1993. She audited the Homewell accounts for 1991 and 1992 and the Hong Wah Textile accounts for 1991/92 and 92/93. In each case, the accounts for the second year were qualified. She said that the two companies need to be looked at as one to understand their activities and the inter- company transactions.

27. From these financial statements two matters emerged. First, the sum said to be owed to Shenzhen Hong Wah is uncertain and without up-to- date verification. Curiously, however, it was earlier confirmed for audit purposes. The usual letter of confirmation was sent to Shenzhen Hong Wah. It was returned, confirming the balance as at 31st December 1992 as HK$105 million. It was signed on behalf of Shenzhen Hong Wah by the Petitioner who, according to his account, was by then locked in dispute with Shenzhen Hong Wah in relation to this debt and about to resign, if he had not already done so, as Chairman.

28. Second, although the Petitioner's case is that the two companies ceased business at the end of 1992, they have continued to be active. They have an office in Pacific Place at a rent of $220,000 per month, although I note the Petitioner proposes to sublet some of the space. Substantial sums have been paid out in commission, salary and expenses to consultants and staff. According to the Petitioner, this was for the purpose of tidying up existing business and seeking new business. Considering it is the Petitioner's assertion that the textile business has been in decline since 1989, I find it difficult to understand why he should be anxious to seek new business.

29. The two companies, Homewell and Hong Wah Textiles, employed one set of staff between them. Amongst others paid on a consultancy basis are the Petitioner and Mr. Tam. The Petitioner said his only source of income is the $80,000 per month he receives as consultant to Hong Wah (BVI) Ltd. This is his younger brother's company. It was set up by the Petitioner but transferred to his brother after he came to Hong Kong to help. The purpose and function of that company is obscure. But on the Petitioner's own admission, he calls the tune. His monthly consultancy is therefore paid to him by his own companies.

30. Mr. Tam has been a consultant to the Hong Wah Group since about September 1992. Although he provides the services through his own company, Beside Company, he is paid $60,000 per month direct by the Petitioner. For this sum, he has looked at one or two projects in China with the Petitioner. Otherwise, his activity seems confined to attending the Group's offices in Pacific Place two or three times a week when he uses the stock exchange information monitor to speculate in share dealing on his own account.

31. The Petitioner is also provided by his companies with expenses, a house in Shatin and the use of three cars and a driver.

32. Quite how all these payments and facilities are funded is obscure. Wholly lacking is any relevant documentation in relation to Asean Timber Company which was for a long time the Petitioner's source of funds. As far as I can tell, it is the Petitioner's case that he and his companies are living on the proceeds of a mortgage of the house in Shatin owned by Sun Po Holdings Ltd, another company about which I lack financial information. The mortgage position in itself is something of a mystery, and in my judgment is indicative of the way in which the Petitioner seeks to confuse anyone trying to delve into his financial affairs. The house was originally mortgaged for US$2 million. Subsequently, it was mortgaged for $1 million which enabled the company or the Petitioner to redeem the original mortgage, leaving $1 million outstanding. I was unable to follow the Petitioner's explanation of this. At all events, there appears to be HK$16 million still outstanding in relation to these mortgages. The Petitioner says that he is unable to pay the instalments and that the bank is likely to fore-close at any time. Considering that he is in imminent danger of losing the home for himself and his two daughters, he was curiously unperturbed.

33. I find it difficult to reconcile this profligate use of such resources as are available to the Hong Wah Group with the Petitioner's assertion of his concern to repay the money owed to Shenzhen Hong Wah. Until that has been done in whole or at least in part, to the utmost of his ability, he said that he has no prospect of doing business in China. His Hong Kong companies have not, however, made any remittances to China or at least none have been disclosed.

34. The financial position of the Petitioner in China is equally obscure. As I have already said, the petitioner claims that he has lost the confidence of bankers, businessmen and officials in China until the dispute with Shenzhen Hong Wah has been resolved. I find this difficult to reconcile with the welcome which he still apparently receives in China even at the most exhalted levels in Beijing. He is still, he says, an important member of a political committee (which one I am not clear) and last year led the Shenzhen delegation which met the assistant secretary of state from USA in discussion concerning MFN. In these circumstances and with Shenzhen Hong Wah anxious to obtain repayment from the Petitioner, I would have expected the Petitioner to be able to obtain and provide to the court full details of the financial position of Shenzhen Hong Wah and the various holdings in that company.

35. As I understand the Petitioner, Shenzhen Hong Wah has only made the most minimal profits since 1989. That, however, does not take into account interest payable on bank loans at the rate of sum RMB13 million per annum. The outstanding interest now exceeds RMB60 million. Such an important financial profit is in conflict with the assertion in the Shenzhen Hong Further, minimal profit is in conflict with the assertion in the Shenzhen Hong Wah brochure of a profit of US$30 million in 1991, which the Petitioner agreed was in fact true. The Petitioner's theme is that the merger of the two companies in Shenzhen and the commencement of production coincided with a decline in the fortunes of textiles and building. Therefore, neither the factory nor the building supplies have been profitable. I accept that the Chinese Government has imposed fiscal and other constraints upon the economy. I also accept that the events of 4th June 1989 did cause trading re- percussion, but all indications are that these have long since been absorbed. It is common knowledge that the Chinese economy is booming and nowhere is this more evident than in Shenzhen. I find the greatest difficulty, therefore, in accepting that the Petitioner's core businesses in Shenzhen have failed.

36. Shenzhen Hong Wah also holds 9 pieces of land in Shenzhen and one in Shanghai. Of the 9 sites in Shenzhen, all except on are vacant. These sites were recently valued by Mr. Edward Wong on behalf of the Respondent. He valued them as at March 1994 as being worth almost RMB400 million. That figure is somewhat speculative. Mr. Wong's expertise in land valuation in China was not clear. Further, he relied upon measurements and designated use of the sites from a document obtained by the Respondent from the Petitioner. He made no independent investigation. What is clear, however, is that whatever problems there might be in relation to the development or sale of the sites and to tax, the sites constitute a valuable land bank for Shenzhen Hong Wah.

37. The Shanghai land is part of a project in Po To. It has stalled because of lack of capital. The investment so far has been US$16 million. Plainly, it constitutes a valuable asset. Indeed, in 1992 there was a proposal and a draft contract to transfer the project to another Hong Kong company for US$22.5 million.

38. Finally, in spite of the Petitioner's several attempts to explain who holds what shares in Shenzhen Hong Wah and whether or not those shares have been paid for, I remain uncertain as to the Petitioner's interest. What is clear is that he still holds a stake through Asean Timber and Homewell. Further, on more than one occasion in evidence the Petitioner referred to "my Shenzhen company", emphasised that he established the Shenzhen factory and emphasised the relationship between Shenzhen and Hong Kong companies, i.e. himself.

39. I have by no means canvassed all the many unsatisfactory aspects of the Petitioner's evidence. To do so would serve no useful purpose because no light would be thrown on the exact worth of the Petitioner and his companies. Suffice it to say that, in all the circumstances, I find that the Petitioner has not disclosed to me the true state of his financial affairs. I may and do draw an adverse inference against him. I am satisfied he is able to pay any reasonable sum awarded to the Respondent. Such an approach was adopted by Mayo J. in his judgment in Louvet v. Louvet HCDJ No. 5 of 1988 given on 14th May 1991. I adopted a similar approach in Chen v. Chen HCDJ No. 6 of 1991, where, in my judgment dated 30th March 1993, I reviewed the various authorities.

40. Having found that the Petitioner is not without assets, I have to consider what contribution if any the Respondent made to the accumulation of those assets. As I have already indicated, the Respondent's case is that from the moment she joined Asean Timber in 1983 she effectively ran the office for that and all of the Petitioner's subsequent Hong Kong businesses until she began to branch out in projects of her own in 1992. It was she who in 1987 suggested that they become involved in property in Hong Kong and who carried out investment in several properties. She accompanied him to China and spent a great deal of time helping him set up his project there.

This continued until 1989 when, at the Petitioner's suggestion, she spent less time in the office and more at home. In 1992, she reached agreement for 3 projects in China for all of which the Petitioner promised financial support, a promise which he has broken.

41. The Petitioner's case quite simply is that the Respondent was never effectively involved in his office or business affairs. He said that he engaged her as a telephonist in 1984, not 1983. He said she was not efficient but as he immediately began to court her, it did not matter that she was often absent from the office.

42. In my view, it would be a sterile exercise to analyse in detail the dates, duties and documents relating to this matter. It is clear, and I am satisfied, that the Respondent did not immediately make any significant contribution to the Petitioner's business or office. As the Petitioner pointed out, the Respondent had just left school and could hardly be entrusted with his business. Further, in cross-examination, the Respondent showed a lack of knowledge of matters which she should be expected to know if she had been running the office, for example, where the timber was coming from and the precise nature of the transportation arrangements from Hong Kong to Shenzhen.

43. I am equally satisfied, however, that she did thereafter work in the Petitioner's office and help in running his Hong Kong businesses. Exhibit R23, the Euro Signal documents, demonstrate that the Respondent was involved in that business in 1987. Those documents also give the lie to the Petitioner's assertion that that company had already ceased doing any steel business. Exhibit R27, the interview form in relation to a Miss Chan, who had applied for a post of clerk, is dated 1985 and has the Respondent's writing upon it.

44. I am also satisfied that the Respondent helped the Petitioner with his Chinese projects by entertaining clients from China and by going to Shenzhen for extended periods to assist him. In no other way could she have been so familiar with his companies and projects, when they were set up and how they developed. All this was done without any formal salary and materially helped the Petitioner in the development of his business interests.

45. I do not accept, however, that the Petitioner promised unqualified financial support for the Respondent's own projects. The Respondent relies upon Exhibit R7, a promise or agreement signed by the Petitioner on 5th November 1992 in relation to the Respondent's proposed construction of a cultural palace and hotel in Guizhou and in relation to projects generally. The Petitioner said he signed this document because he was forced to do so, the force being the Respondent keeping on and making a thorough nuisance of herself. Indeed, this was the Petitioner's explanation of a number of matters, such as the transfer of shares in his Hong Kong companies to the Respondent, and a number of separation and maintenance agreements signed by him. Examples of the latter were signed on 26th August 1992. Inter alia, the Petitioner agreed by these documents to pay the Respondent HK$500,000,000 as a lump sum and HK$500,000 per month as maintenance. Miss Eu acknowledged the force of my suggestion that such proposals were wholly unrealistic. To me, these documents and the Guizhou agreement smack of "anything for a quiet life".

46. I also take into account the Petitioner's evidence, which I think was not really disputed, that the marriage which was any way of no great duration was beset by quarrels and threatened separations. Thus in 1988, the parties went to Australia where the Petitioner purchased a house in the Respondent's name for her to live in after she had gone through the necessary immigration procedures. That idea did not come to fruition. Later, they looked at Canada for the same purpose. Given the less than happy state of their relationship, it adds to the unlikelihood of the Petitioner agreeing in 1992 to give unqualified substantial financial support to the Respondent.

47. I find that the Petitioner's promised support for the Respondent amounted to no more than that he would try and help her obtain finance through banks or other sources.

48. Although I am satisfied that the Respondent did help the Petitioner in his business, that help was not in any way comparable with the contribution made by the wife in Gojkovic. Certainly, the Respondent helped the Petitioner in his Hong Kong businesses which, in their earlier years at least, generated profits which enabled the parties to live in some modest degree of comfort and enabled the Petitioner to exploit his contacts in China. But as I have found, the Petitioner's success depended largely on those contacts in China.

49. In my judgment, the Respondent is entitled to a capital or lump sum which, as in C v. C [1990] 2 HKLR 183, will properly reflect her contribution to the family over a period of about 7 years, but not a greatly increased lump sum to enable her to finance her own independent projects.

50. The matrimonial homes, living and personal expenses and cars have been provided by one or more of the Petitioner's Hong Wah companies or by funds from those companies. The Respondent is now living in a flat in Dynasty Court, Mid Levels. Before that, the matrimonial home was Nicholson Tower in Wong Nai Chung Road. The Respondent had become accustomed to receiving up to $100,000 per month into her bank account. In addition, the Petitioner made available to her funds of up to $200,000 a month to cover household and other expenses. The Petitioner claims that these sums were paid because he was afraid of the Respondent harassing or pestering him. I have already indicated that the Petitioner was prepared to try and seek a quiet life but the fact remains that he was able to make such money available to the Respondent. The Respondent also had the use of two cars. Money was therefore no problem as far as the Respondent was concerned. She was extremely well off.

51. The Respondent has itemised the expenses which she considers she reasonably requires. On a monthly basis, she seeks almost $42,000 in relation to the flat at Dynasty Court. I do not think any objection can be taken to this amount. She then seeks approximately $35,000 in relation to the 2 cars. In my view, notwithstanding the previous life style, one car is sufficient for her reasonable requirements. The Respondent can make a choice between a Mercedes and a Lexus. One car will reduce the amount required for maintenance and parking fees. I deduct $6,000 from this amount.

52. The Respondent requires almost $78,000 for food, medicine and entertainment. To me, $20,000 for entertainment and $10,000 for lunch and dinner with her daughters goes beyond the reasonable requirements. This sum should be reduced to $70,000.

53. The Petitioner seeks $3,500 per month for educational purposes. I see no objection to that. She then seeks $80,000 per month for clothes. accessories and jewellery. Notwithstanding, the previous lavish life style, again I think this excessive. $50,000 per month seems wholly appropriate.

54. Finally, on a monthly basis, the Respondent seeks $10,000 for maintenance for her mother. I have not seen anything to justify this sum. It should be deducted. A monthly sum which will meet the Respondent's reasonable requirements is therefore $194,433.66.

55. Next, the Respondent seeks $631,200 for yearly expenditure. Of this, $250,000 is for maintenance, up-keep and refurbishing of the flat, its furniture and electrical appliances. As far as I can tell, that is a figure plucked from the air. It seems to me beyond anything that is reasonable. I think a proper sum is $150,000.

56. The Respondent asks for $200,000 for making overseas trips with her daughters. I have no real details or information about the Respondent's erstwhile travelling habits. In my view, a sum of $100,000 would be reasonable for her overseas travelling requirements. In so far as she would be accompanied by her daughters, I would expect the Petitioner to make arrangements independently for their expenses. The amount required for car insurance must be halved to provide for one car only at $50,000. Accordingly, a sum of $381,200 is required on an annual basis.

57. After converting the monthly expenses to an annual sum, $2,714,396 are needed for the Respondent's reasonable requirements.

58. The parties or their companies own several flats and offices. The current estimated net value is approximately $74,000,000. This includes the value of the flat at Dynasty Court which is occupied by the Respondent. If the value of that flat is deducted, the balance is some $57,000,000.

59. The Respondent's accountant has provided a Duxbury calculation for the court. That calculation produces a capital sum of HK$108,000,000. It was, however, based upon a figure of HK$3.6 million per annum being required to meet the Respondent's needs. I have already reduced that figure to HK$2.7 million.

60. Taking into account the relatively short duration of the marriage and the Respondent's contribution to the assets which have been generated, I am of the view that the Respondent's requirements will be adequately provided for if I order that the properties be transferred to the Respondent for her to deal with as she sees fit. Alternatively, that the properties, other than Dynasty Court, be sold forthwith and that the proceeds of sale be paid to the Respondent. I will hear the parties on the appropriate order.

61. The Duxbury calculation provided by the accountant did not take into account the outstanding mortgage payments on Dynasty Court. I make a further order that the Petitioner is to make provision for those payments either by paying off the mortgage forthwith, alternatively by defraying the monthly payments so long as they continue.

62. The Respondent also sought provision for monthly hire purchase payments on the Lexus car, the payments being some $20,000 per month. In view of my previous decision in relation to the cars, it is open to the Respondent to choose a car which is not subject to such payments. I do not think it appropriate to make provision for these payments.

63. The Respondent also sought $30,000 for special dental treatment in 1994. I make no provision for this. It seems to me that the Respondent ought to be able to absorb this modest sum from the award which I am making to her.

64. I make an order nisi that the Petitioner pay the Respondent's costs of this application and that the matter is fit for 2 counsel.

65. There will be liberty to apply.

Representation:

Miss A. Eu, Q.C. and J. Lam inst'd by Charles Yeung and Clement Lam for Respondent

Petitioner in person