Lee Wing Tat v. Lee Chan Lo Kai

HCMC000014/1976

Requirements to be complied with for obtaining leave to apply for periodic payments or a lump sum payment under Cap. 192. Factors which should be weighed upon such an application including the effect of delay and the absence of any explanation for the delay. Leave granted in this case.

Hearing dates: 17th to 19th and 27th October 1983.

No. 14 of 1976

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

DIVORCE JURISDICTION

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BETWEEN

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Coram: The Hon. Mr. Justice Mayo in Chamber.

Date: 27th October 1983.

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DECISION

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1. The Respondent, who I will be referring to as the wife, is applying for leave to issue a notice of intention to apply to the Court for different types of relief under the Matrimonial Proceedings and Property Ordinance Cap. 192. The petitioner, who I will be referring to as the husband, opposes the application. The notice which the wife wishes to issue claims relief under section 4 of the Ordinance for both periodical payments and/or a lump sum. The relief claimed under section 11 is claimed in the alternative and seeks a variation of the terms of two deeds of settlement which were made by virtue of a Court order made by Mr. Justice Cons on the 9th July 1976 and a further order on the 16th February 1977. As in the proposed notice I will refer to these Deeds of Settlement as being the 1976 and the 1977 Deeds of Settlement. The third form of relief sought by the wife is framed in general terms.

2. The husband is and was at the time of the marriage an extremely wealthy man. The parties married in July 1958 and there were four children of the marriage. The youngest child Karen is now aged 20. It is common ground between the parties that during the subsistence of the marriage the parties maintained an extremely high standard of living. The husband filed a petition for the dissolution. of the marriage in 1976 on the grounds of the wife's unreasonable conduct. The husband made a number of fairly serious allegations in the petition including acts of violence, excessive extravagance, and claimed that the wife was a compulsive gambler. The wife did not file an answer to the petition and a decree nisi was made on the 17th May 1976 which was followed shortly by a decree absolute. It was further ordered that questions relating to financial relief should be adjourned. In due course the husband made an application to Mr. Justice Cons inter partes but the wife did not appear at the hearing. Put very simply Mr. Justice Cons ordered the husband to settle the sum of 3.25 million dollars for the benefit of the wife and the children. He also ordered that a sum of one million dollars be set aside to meet the wife's gambling debts. As it transpired none of the wife's creditors substantiated any claim on these monies and the Court later ordered that these monies should be added to the original trust fund. Pursuant to these orders the Deeds of Trust which I have already referred to were drawn up and finalised and the Hong Kong and Shanghai (Trustees) Limited were appointed Trustees and assets were vested in the Trusts. It is relevant to observe that the Trustees were given wide powers of investment and basically the scheme of the Trust was that the income of the Trust was to be utilized for the benefit of the wife and the capital was to be payable for the child or children of the marriage appointed by the wife in her will or by Deed. The Trustees also had power to purchase a house or flat for the wife for her to use as a dwelling place free of rent.

3. The matrimonial home, which was a house in Island Road, had been registered in the wife's name. Mr. Justice Cons also ordered that the wife must assign the house back into the husband's name failing which the Registrar of the Supreme Court was to execute the Deed of Assignment. This was subsequently done and the assignment was executed by the Registrar.

4. The wife was required to vacate the matrimonial home. She refused to do so and it was necessary for the husband's legal advisers to invoke the assistance of the police in removing her and her mother from the premises. Affidavit evidence was placed before me concerning the wife's removal from the premises and there was also evidence of other incidents when she attempted to return to the property. These incidents must have been harrowing experiences for all concerned. Mr. Justice Cons granted an injunction restraining the wife from molesting the husband or attending at the premises. Notwithstanding the existence of such an injunction she still persisted in her efforts to make a nuisance of herself. and harass the husband.

5. From the time of her vacating the matrimonial home until 1981 the wife led what can perhaps best be described as a nomadic existence moving from one luxury hotel to another. She did not take advantage of the provisions contained in the Trust Dead whereby the Trustees could purchase suitable accommodation for her. With the benefit of hindsight this was unfortunate. It appears to be common ground between the parties that there was a very substantial increase in the value of real estate in Hong Kong during this period. With the means available to the Trustees they could have purchased quite a good flat if the wife had requested them to do so shortly after she left the matrimonial home. However by 1981 the price of flats had risen to such an extent that it is unlikely that the trustees could have purchased a flat which the wife would regard as being suitable for her. In 1981 she moved into a flat in Tai Koo Shing which I understand is a large development of flats which are normally occupied by middle class people. The flats are not commodious and the environment would be in no way comparable with the situation of the property in Island Road.

6. In 1977 the wife applied to the Court of Appeal for leave to appeal against the orders which had been made. The basis of her application was that she had no knowledge of the contents of the various documents which had been served upon her during the course of the litigation. The Court did not accept the evidence she deduced in this connection and in 1979 leave was refused on the basis that she was fully aware of the position and had deliberately chosen not to participate in the litigation.

7. I will now consider the affirmation which the wife has affirmed in support of the present application. The main thrust of her affirmation is that the financial position of the husband has greatly improved since 1976. I do not think that it is necessary for me to comment in detail upon the husband's enhanced financial situation as Mr. Litton, who was representing him, agreed that there had been a substantial improvement in his position. He accepted that at all . times the husband is and was a very wealthy man and it was immaterial whether his assets amounted to 50 million dollars or 100 million dollars. The wife then went on to deal with her financial position. She complained that she did not have enough money available to her and it was quite impossible for her to maintain the standard of living she had been used to on the income she presently received from the Trustees of the 1976. and 1977 Settlement. It had been necessary for her to spend all her savings and she gave particulars of all the assets now remaining in her possession. They did not amount to very much. She agreed that she was now in receipt of a monthly income of $40,000. She claimed that this was totally inadequate for her needs. She itemised her expenditure. It was interesting to note in this connection that she claimed that she spent $9,000 per month on food for herself and her mother and a further $10,000 per month for entertaining her frields and giving them presents on occasions such as their birthdays or weddings etc. As I have said earlier she is presently living in a flat at Tai Koo Shing. She did not consider this accommodation to be in any way suitable for her and her mother. She claimed to have made inquiries which indicated that the rental payable for suitable accommodation for her in the vicinity of Repulse Bay, Middle Bay or South Bay was in the range of between 125 and 150 thousand dollars per month and the purchase price of such premises would be of the order of between 15 and 16 million dollars. She also gave evidence that she had given thought to commencing her own business. She expressed the opinion that if she was to do this in the way she wanted to she would require capital of 20 million dollars. I have no doubt whatsoever that the estimate which have been made by the wife bear little resemblance to reality and it is difficult not to obtain the impression that the wife has an irresponsible attitude towards money.

8. There are a number of matters which are not referred to in the wife's affirmation. Other than the passing reference to the monthly income she receives from the Trustees she does not include any particulars concerning the Trust Funds. Such information is of importance. It would be impossible for the Court to attempt to consider making any order in favour of the wife unless it is in possession of complete particulars of both parties assets. It may well be the case that the assets comprised in the Trust Funds have significantly appreciated since 1977. It may even be the case that the assets held by the Trustees may be sufficient to enable them even now to purchase a suitable flat for the wife. It may not necessarily be the case that it would be incumbent on them to significantly reduce the income which would be payable to the wife if the investments were to be changed so that the funds were invested in investments yielding a high income rather than being the sort of assets with a low yield and a good prospect of capital appreciation. As a result of the wife's failure to supply detailed information we are left in the realms of speculation.

9. Another interesting omission from the affirmation is any attempt at an explanation for the delay which has ensured in making this application for leave. The absence of such an explanation does cast some doubt upon the bona fides of the application. A further omission is the absence of any explanation concerning her gambling activities. Allegations concerning the wife's gambling habits were made in the petition and were not contested. Indeed in an earlier affidavit the wife affirmed that she had been driven to gambling as a result of the husband's misconduct. It is significant to note that she does. not state on affirmation that she has discontinued her gambling habits.Mr. Bernacchi who was representing the wife submitted that an inference could be drawn to this effect as it appeared from the financial particulars she gave concerning her present circumstances that she would have insufficient money to indulge this passion. I regret that I do not see much merit in this submission as she would have a sufficient amount of money available to her to gamble if she wished to do so.

10. Before I deal with the submissions which were made by the parties I think that it is desirable to delineate the scope of this application. At the commencement of this Decision I indicated the three separate heads under which the wife is seeking to obtain relief. The first is to obtain Dave to apply for either periodic payments under section 4(1)(a) of Cap. 192 or a lump sum under section 4(1)(c) of the Ordinance. Mr. Litton conceded that I had power to grant such leave but argued that having regard to all of the circumstances of the case I should not do so. With respect I find myself in agreement with this submission. The second head of relief claimed is for a variation of the orders which were made by Mr. Justice Cons pursuant to section 11 of the Ordinance. Mr. Litton contended that regardless of the surrounding circumstances I had no power to grant such leave having regard to the provisions contained in section 11. It is only in limited circumstances that variations can be made to orders which have been made. He argued that Mr. Justice Cons' two orders relating to the settlement of funds had been made pursuant to the provisions contained in section 6(c) of the Ordinance. I am satisfied that this is correct. It can be seen from section 11 that the Court has no power to make an order for the variation of a settlement which has been made pursuant to section 6(c) of the Ordinance Mr. Bernacchi reply to this was that it might be open to him to found an argument before the trial judge who hears the substantive application to the effect that the payments which were presently being made by the Trustees to the wife constituted periodic payments and accordingly it might be possible to vary the orders. I regret that I see no merit in this contention and I do not think that an argument along the lines indicated by Mr. Berhacchi would even be arguable. The third head under which relief is claimed is couched in general terms. I find myself in agreement with Mr. Litton's contention that it would be inappropriate for the Court to grant leave in such general terms. The result of all this is that I am satisfied that Mr. Litton is correct in his contention that I should only consider granting leave in respect of the proposed applications under sections 4(1)(a) and 4(1)(c) of the Ordinance and I propose proceeding accordingly. I will now consider whether it is appropriate in the circumstances of this case to grant leave for the applications under 4(1)(a) and 4(1)(c) of the Ordinance.

11. As an initial step it is necessary to consider the criteria which should be adopted in deciding whether or not it is appropriate that leave should be granted. Ormrod L. J. referred to the principles which should be adopted at page 208 in his judgment in Chaterjee v. Chaterjee⁽¹⁾:

"In my judgment, the court ought not to refuse leave to apply in any case in which on the evidence the applicant has or. appears to have reasonable prospects of obtaining the relief claimed, or, to put it in another way, has a seriously arguable case. It will not be enough merely to demonstrate that oh the one third yardstick the applicant can make a case on the figures (as certain passages in the judgment of Arnold J. in the present case seem to suggest). To assess the prospects of success (as indicated by Davies L.J. in Jones v. Jones⁽²⁾) all the facts referred to in section 25 of the Act of 1973, including, in particular, practicability and conduct, in the sense of the way in which the parties hove conducted themselves and their affairs up to the time of the application, must be considered. Delay, if it really is delay in the sense of prejudicing the other party, may have an important influence on the justice of the case. So may conduct which can be described as 'lulling' the other party into the belief that all claims have already been dealt with. Similarly it may be unjust to interfere with property rights after a lapse of time during which the other party has ordered his or her affairs in a reasonable and proper manner in the belief that the financial consequences of the divorce have been settled (as was said in L. v. L.⁽³⁾). On the other hand the purpose of rule 68-will be frustrated if the hearing of the application for leave is made the occasion for a detailed investigation with consequent expense."

This test is not in any way at variance with the test referred to by Sir George Baker P. in Marsden v. Marsden^{(4 )} at page 854 he states:

"The rule is clear. The application must be made in the petition. If it is not the leave of the court is required. This cannot mean that leave is to be given for the asking. I am not fettered of course by the previous exercise of the registrar's discretion. I must give it the weight it deserves but I am in no way bound by it. See Evans v. Bartlam⁽⁵⁾ No excuse or reason has been given for the omission of the application from the petition, and there is certainly no satisfactory explanation of the husband's change of mind, of Spill v. Spill⁽⁶⁾. In my opinion there must be some reason or explanation before the court gives leave under rule 68(2)."

12. In my view what is required is that I should have regard to all surrounding circumstances. Having considered these carefully I must then decide whether the wife has a seriously arguable case.

13. Mr. Bernacchi took me through all of the various factors which a Court has to consider on an application under sections 4(1)(a) and 4(1)(c) of the Ordinance. These factors are referred to in section 7. The main point made by Mr. Bernacchi was the very wide disparity between the present financial circumstances of the husband. and those of the wife. There was a similar disparity between the standard of living the wife previously enjoyed during the marriage and the present conditions she was living under. To emphasise this he referred to the fact that the wife received an allowance from the husband of $35,000 per month in 1973 and the husband continued to pay all outgoings and expenses at the matrimonial home. This standard of living was a far cry from her present circumstances where she is living in a small flat in a middle class area and only receives an income of $40,000 per month which has to cover all her expenses. $35,000 in 1973 had far greater purchasing power, than a similar sum today.

14. Mr. Bernacchi then went on to consider the conduct of the parties. He agreed that this was a factor which had to be considered. If I understood him correctly he accepted that the wife's conduct had by no means been beyond reproach since 1976. He claimed, however, that it had not been so atrocious as to justify and substantial reduction in the amount which she should receive. Even where a wife had attacked her husband with a knife resulting in his serious injury the Court had only made a comparatively small deduction in the amount which she should receive. See Bateman v. Bateman ^(7).

15. Mr. Bernacchi then went on to argue that the "clean break" decisions such, as were referred to in Minton v. Minton⁽⁸⁾ did not have any application to the present case. He accepted that there was authority for the proposition that parties should not be free to reopen questions relating to financial provisions where there had been prior agreement that there should be finality. However these considerations were not relevant in the present case as the wife had never consented to there being any finality.. Indeed it could be seen from the notes of Mr. Justice Cons' decision in 1977 that he had indicated that if the wife did wish to reopen the question of financial provisions he thought that it was unlikely that any Court would not afford her an opportunity of doing so. It could be seen from the headnote in Dipper v. Dipper⁽⁹⁾ that in the absence of any agreement to the contrary it would be possible for the parties to reopen these questions.

16. Mr. Litton's main grounds for opposing the application were that the wife had proved herself to be a capricious person and it appeared that her main motive in making this application was to harass the husband. This appeared to be consistent with her conduct in the past. This could be seen partly by the delay which had occurred in making the application. He did, however, accept that the delay had not been prejudicial to his client. He also argued that the wife had not made out a case that she was in any need. She had failed to provide sufficient information to enable the Court to consider the matter sufficiently as she had not given any details of the assets presently comprised in the Trust Funds.

17. I have considered all of these matters very carefully. I have come to the conclusion that if I grant leave to enable the wife to make applications to the Court under 4(1)(a) and 4(l)(c) of the Ordinance there is a reasonable prospect of her application being successful. Having regard to the very great disparity in the circumstances of the husband and wife at the present time I think that she will have a strong arguable case for obtaining some relief from the Court. I have been concerned about the delay which has occurred and the absence of any explanation from her concerning this delay. Although these are factors which have to be considered I do not consider them to be overwhelming factors and I do not think that she should be deprived from making an application on these grounds alone. I have also considered the possibility of limiting the leave to making an application under section 4(1)(c) in respect of a lump sum payment. I have decided that it would be wrong for me to attempt to fetter the hands of the judge who will hear the substantive application by attempting to restrict the scope of the application which will be made in this way. In this respect I have been particularly concerned about the allegations which have been made regarding the wife's propensity for gambling. It may well be the case that she still has this propensity and the judge hearing the application may consider it to be preferrable to order periodic payments rather than ordering a lump sum payment. I also accept that it may well be the case that the judge hearing the application may prefer to adopt the safer course of making a similar order to the order made by Mr. Justice Cons in 1977 when he ordered that the husband should settle funds for the benefit of the wife and children. These are all matters which will be considered by the judge in due course and I consider that it is desirable that I should not in any way restrict the scope of any orders he may see fit to make. I will hear the parties as to costs.

(1)    (1976) Fam. 199.

(2)    (1971) 3 A.E.R. 1201.

(3)    (1962) P. 101.

(4)    (1973) 2 A.E.R. 851.

(5)    (1937) 2 A.E.R. 646.

(6)    (1972) 3 A.E.R. 9.

(7)    (1979) Fam. 25.

(8)    (1979) A.C. 593.

Representation:

Mr. H. Litton, Q.C. & Mr. P. Chan (Wilkinson & Grist) for Petitioner.

Mr. B. Bernacchi, Q.C. & Mr. P. Woo (John Ip & Co.) for Respondent.