Robert Yung Pak Liang v. Lena Yung Dai Ming
Read the full judgment text of FCMC 309/1980 on BabelCite. This Family Court judgment before H. Wong, D. J..
Family law – ancillary relief – maintenance – costs – unreasonable conduct – scope of appeal – lump sum payment – Matrimonial Proceedings and Property Ordinance – District Court – Appeal from Registrar's decision – Wrong in principle to reduce maintenance to pressure wife to work – Costs awarded due to husband's non-disclosure and dilatory conduct – Maintenance varied to $4,500 – Costs upheld
Legal issues: Scope of appeal · Maintenance assessment · Costs award
Outcome: Appeal allowed in part; maintenance increased to $4,500; costs upheld; lump sum not considered
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FCMC000309/1980 Appeal from Registrar's decision - Hearing de novo, but only confined to the issues set out in the notice of appeal - Wrong in principle for the court to make an order for a smaller maintenance than the case merits so as to bring pressure upon the wife to be in gainful employment and thereby reduce the husband's liability to maintain her - costs awarded on five years' separation on unreasonable conduct of the husband. IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA DIVORCE JURISDICTION ACTION NO. 309 OF 1980 ______________________
___________________ Coram: H. Wong, D. J. in Court. Date: 11th March 1983 ---------------------------- JUDGMENT ---------------------------- 1. This is an appeal against the Registrar's decision on ancillary relief in a matrimonial action. I shall, for convenience's sake, call the husband appellant as the "Husband" and the wife respondent as the "Wife", although their divorce decree has been made absolute. 2. The couple was married in Hong Kong in 1962 and two children were born to them in 1963 and 1965 respectively. In 1974 the Wife alone went to live away from the rest of the family and thenceforth was given $4,000 by the Husband as monthly maintenance. Their marriage was eventually dissolved in September 1980, with the children's custody being given to the Wife but control and upkeep remaining vested in the Husband and with maintenance. to the Wife. continuing on the same term as before. 3. On 13.1.82 the Wife's application for ancillary relief was heard by Mr. Registrar Blackwell (as he then was) who: (a) confirmed the then existing interim order of maintenance of $4,000 (b) ordered the Husband to pay to the Wife a lump sum of $200,000 and (c) awarded costs to the wife. It was against this decision that the Husband appealed on 2 grounds: (1) for a reduction of the maintenance and (2) for the cancellation of the order as to costs; whilst the wife also cross-appealed for an increase in that maintenance. 4. All along the Husband was legally represented and his notice of appeal was filed on 18.1.82. At the hearing of the appeal on 28.10.82 the Husband's counsel proceeded on the basis that all 3 items of the Registrar's order, viz, lump sum payment, maintenance and costs, were challenged 5. Although I agree with both counsel that the appeal is a hearing "de novo", yet I feel that since the court was moved to try what was set out in the notice of appeal, i.e. on maintenance and costs, it could not, without the Wife's consent, hear the Husband's argument on lump sum payment which is a matter extraneous to the scope of that notice. It should also be noted that the Husband had 9 months between January and October 1982 within which to decide what items to prosecute but had taken no steps to amend the ambit of the issue to incorporate the third item of lump sum payment in his notice of appeal. In the event I hold the view that the question of lump sum payment cannot be considered. Nevertheless, for the sake of argument, I would, if the matter was allowed to proceed, deal with it in the following manners According to the notes of the proceedings before the Registrar, the Husband stated that he was managing director of. lotus international limited, a travel agency (hereinafter referred to as "lotus Ltd.") for many years and, in order to enhance his position vis-a-vis clients, he was given, without consideration, 10% of the issued shares of that company by H.P. Kong, Lotus Ltd's largest shareholder and the person having its effective control. The Husband's story was also that that donation would be returned to the donor once he left Lotus Ltd. He admitted that his said holding consisted of 550,000 shares at par value of $1.00 each and that the equity of lotus Ltd., as shown in the Balance Sheet as at 30.9.80, stood at $12,107,430.00, from which should be deducted a fraud perpetrated by an employee of the company of $3,500,000.00. Furthermore, he argued that his shares were not marketable because of the restriction on their transfer. The Registrar appeared to reject that argument and held that the Husband's shares had real value and could be realized. He also felt that there were special circumstances being involved and assessed $200,000.00 as an arbitrary lump sum. For my part, I would hold the view that, first, in the absence of proof that the Husband held those shares in trust for H.P. Kong, the claim that H.P. Kong had equitable interest in them would be untenable. Second, I would say that the said restriction on transfer of shares was one that could be found in the normal Articles of Association of any private limited company, so that the Husband's shares should have real value and were realizable. Third, taking the Husband's words at their best, his shares would be worth at book value as follows:
As the Husband is shown in the same Balance Sheet as being indebted to Lotus Ltd, in the sum of $155,000.00, I would deduct this figure from $860,743.00. The resultant net capital asset of the Husband, which was his only one, would thus amount to $705,743.00. From this standpoint I would award a lump sum to the Wife ("Preston v. Preston" (1982) 1 All E. R. 41 CA) and in order to assist the Wife to meet her indebtedness of US$38,000.00, apply the one-third rule with a slight adjustment downward to 30% because the Wife had not contributed to the acquisition of that asset. I would thus vary the Registrar's order on lump sum of $200,000.00 to the extent of $211,723.00 (30% of $705,743.00). In my view the award of lump sum to the Wife would not affect the Husband's earning capacity, but would be in consonance with the observations of lord Denning in "Watchtel v. Watchtel" (1973) 1 All E.R. 829:
6. As regards maintenance, the evidence of the Husband is that in November 1980 he married his second wife who is a member of a wealthy Chinese family in Japan. He has since lived rent-fee in her palatial home in Tokyo and worked for a group of restaurants and associated business operated by his present father-in-law. For that employment he received 630,000 yens (equivalent to $17,325.00) in monthly salary, in addition to his receipt of $2,000.00 a month as titular Vice-President of lotus Ltd. However, he maintained that he had to defray various expenses, including the cost of education of his children in America (US$16,050.00 a year), maintenance to the Wife and allowance to his parentsl, all of which resulted in a shortfall to his budget. 7. It is not disputed that the Wife has never been in gainful employment since her marriage and her livelihood has always depended. -on the Husband's financial assistance. She has lived by herself in a two-room flat and her monthly expenditure consisted of (a) rent of $2,018.00, (b) management fees of her residence of $160.00 (c) utilities charges of $600.00 and (d) food etc. of $1,222.00, totalling $4,000.00. She now claims that the current maintenance of $4,000.00 is insufficient for her present needs. 8. On the issue of maintenance the Registrar's findings read:
The Husband claimed to have earned $137,300.00 for the year 1979/1980, of which he incurred a deficit on account of his high expenditure. I am inclined to disbelieve that claim and am reinforced in my disbelief by (a) his relatively small earnings as compared with the huge profit of $3,062,445.00 that he had played a leading part in bringing about, (b) his admission of having made false, though inflated income tax returns for many years to the Inland Revenue Department to cheat I.A.T.A. of which Lotus Ltd. was a member and (c) the unexplained Directors' Remuneration - he was one of three directors - of $1,484,740.00 shown in the Profit & Loss Account for the year ended 30.9.80. By the same token and in the absence of supporting evidence, I Likewise feel some doubt about the Husband's alleged deficit for 1981/82, which is the year under consideration. 9. In assessing the financial requirement of the Wife I must take into account her earning capacity, mental and physical resources, current expenditure and actual standard of living and generally, matters set out in S. 7 of Matrimonial Proceedings and Property Ordinance, Cap. 192. And while I have regard to the Wife's unutilised capacity to produce income, it would be wrong in principle for me to make an order smaller than the case merits so as to bring pressure upon her to do something she not unreasonably refuses to do ("Wakeford v. Wakeford" (1953) 2 All E. R. 827), or expect her to go out to work, now that she is aged 43 and only with a secondary education, in order to reduce the Husband's liability to maintain her ("Rose v. Rose" (1950) 2 All E.R. 311, C.A.). 10. Although the Husband now has to foot a bigger bill for the children's schooling than before, he is living comfortably and enjoying a high salary. It is said that where the Husband's means increase after his re-marriage on account of the domestic, social and business gifts of his new wife, that factor may well be a matter to be considered. as to what claim the first wife has on his future ("Samson v. Samson" (1966) P. 52, 58 per Sir Jocebyn Simon, P.). On the other side of the coin the Wife has been in receipt of $4,000.00 each month for the past 9 years, which amount has undoubtedly not caught up with the continuous rate of inflation ever since. In the circumstances I consider that a sum of $4,500.00, which is slightly more than what the Husband now pays to the education of each of the children, would be appropriate. I would add that that obligation would be within the Husband's ability to pay ("J - P.C. v. J - A. F." Probate Division (1955) P. 215). In the upshot, I vary the Registrar's order of $4,000.00 by substituting $4,500.00 for it as monthly maintenance to be paid by the Husband to the Wife. 11. On the question of costs it is well recognised that no such order should be made where the divorce was based on 5 years' separation and ancillary relief followed therefrom. However, Rayden says at P. 1386:
Although in the present case the Registrar gave no reasons for his award of costs to the Wife, I am inclined to say that that award is justified because the Husband (a) did not make full disclosure of his financial position during his service with lotus Ltd., e.g. his untrue claim of holding of 440,000 instead of 550,000 shares, his omission of receipt of double pay in his affidavit of means, his unsatisfactory explanation on transfers of the company's funds into and out of his personal back account etc. ("Wright v. Wright" (1973) 3 All E. R. 932 and "Payne v. Payne" (1968) 1 All E. R. 1113) and (b) his dilatory attitude in paying maintenance to the Wife ("Preston v. Preston" (1982) 1 All E. R. 41, C. A.). 12. I consequently uphold the Registrar's said order as to costs.
Representation: Miss Maria Yuen, instructed by Johnson, Stokes & Master for the husband. Mrs. V. Penlington, instructed by Yu, Tsang & Loong for the wife. |