Tung Yu Lien Margaret also known as Shee Yu Lien As Well As Shee Yu Lien Margaret v. Shee Kok Chong/Title>
Read the full judgment text of HCA 545/1989 on BabelCite. This High Court CFI judgment.
1. There are before me 2 summonses taken out by the Defendant. The earlier is dated the 4th March 1989 and seeks:
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HCA000545/1989 1989, No. A545 IN THE SUPREME COURT OF HONG KONG HIGH COURT _____________ BETWEEN
___________ Coram: The Hon. Mr. Justice Nazareth in Chambers. Dates of Hearing: 27th-28th April, 1st May, 1989. Date of Delivery of Judgment: 19th May, 1989. ______________ J U D G M E N T ______________ 1. There are before me 2 summonses taken out by the Defendant. The earlier is dated the 4th March 1989 and seeks:
The second summons is dated the 17th April 1989 and seeks the discharge of an order made by Deputy Judge Sharwood on 10th February 1989 for discovery of the whereabouts and the trace of moneys withdrawn or transferred from joint accounts of the Plaintiff and Defendant. 2. In her affidavit in support of the first summons, the Plaintiff deposed to the following facts. She and the Defendant were married in Singapore on 27th March 1979. They were co-directors in a number of companies. They worked together and were so remunerated. From time to time they deposited their savings and earnings in various bank accounts by way of fixed deposits. She specified a total of 9 deposit accounts in 3 different banks, all in Hong Kong. The banks were authorised to act on the single signature of either; notwithstanding that, she says, half the deposits actually belong to her. She has separated from the Defendant and now resides in the U.S.A. on a temporary basis. She has also commenced divorce proceedings in Singapore on the ground of adultery. And she believed that the Defendant was then living at Hillwood Road in Hong Kong, within the jurisdiction of this court. Recently she had discovered that the Defendant had withdrawn some deposits and had transferred others into his sole name without her knowledge or consent. She verily believed that unless an ex-parte injunction was granted the Defendant might withdraw all the funds and render them untraceable. She had taken advice and instructed her solicitor to take out a writ, which she verified. 3. The same affidavit was relied upon in the "inter-partes summons" heard by Deputy Judge Sharwood. The summons was served by delivery to the Hillwood Road premises. It is probable in my view that the Defendant was in Singapore and did not receive it in time. He did not appear at the hearing of the summons. 4. So the picture that emerged from the Plaintiff's affidavit was one of simple deprivation and invasion of property rights, and consequent action to recover her half share of earnings and savings. But a very different picture emerges from the Defendant's affidavits. He was born in China in 1930 and came to Hong Kong in 1962. He was married to his first wife and had 3 children. He first worked as a building site foreman and later started on his own in a small way in the construction business. Following the riots and business standstill in 1967, he moved to Singapore in 1968. 5. For a while he helped in his brother's construction business. Having discovered a gap in the manufacturing of steel windows, he started up a factory for that purpose called Sinchew. In 1971 he settled down in Singapore although his wife and family remained in Hong Kong. 6. In 1972 he met the Plaintiff, who was working as an airhostess based in Taiwan, although she was born in Korea. That year or the next they commenced to cohabit in Singapore. To enable her to stay in Singapore he went through a form of marriage with her in 1976. 7. Meanwhile his business had begun to prosper. He opened a steel rolling mill called First Rolling Mills, and also a factory in Indonesia called New Crown Metal Works. 8. In 1977 his first wife discovered his relationship with the Plaintiff, which led to the Plaintiff, being ordered to leave Singapore, not being regarded as his lawful wife. He put S$250,000 shares in Steel Rolling into her name so that she could remain as an investor with resident status. He then divorced his first wife in 1978 and legally married the Plaintiff on 27th March 1979. They were living in a house at 38 Third Street, registered in the name of Sinchew. 9. He purchased it with funds from a joint account to which he primarily had contributed. But as he was not a citizen he had it transferred to her name as she had investor resident status. 10. In 1979 he set up the Ann Lee Company for construction business and the import and export business. Although good in business, his English was minimal and the Plaintiff had been assisting him in his office work, particularly English correspondence and accounts. 11. In 1981 he set up an aluminium window factory in Singapore. 12. From all his business he accumulated considerable wealth and had many investments, including a 2 storied residential and shop building, a Chinese restaurant, a night-club, real estate interests and shares:- 13. In Hong Kong he had numerous bank deposits initially made in his own name. Later to facilitate dealing they were held in his and the Plaintiff's joint names. The money that went into them was earned by him with the assistance of the Plaintiff. The Hillwood Road property was purchased with funds from the Hong Kong bank accounts but put into her sole name. 14. Despite some disagreements, he had no reason to believe that theirs was not a happy and successful marriage. But suddenly on 22nd June 1988 she went to Hong Kong and instructed a solicitor to procure a divorce because she claimed the Defendant had had an affair with a woman. She then returned to Singapore but not to the family home at 38 Third Street. The Defendant had her followed and discovered she was having an affair with a Mr. X (there is in force an order of the Singapore count restraining his being named by the Defendant). He caused the evidence including tapes and photographs to be presented to Mrs. X on 12th August 1988 with a view to ending the affair. Mrs. X confronted Mr. X who informed the Plaintiff in a telephone conversation that was taped. The Plaintiff left Singapore for Hong Kong on the 13th, and Mr. X did so on the 14th. 15. On the 15th the Plaintiff returned to Singapore secretly, and took away all the share certificates held in her and the Defendant's name and the title deeds of the 2 storied building. Also, the Defendant deposes, the Plaintiff by drawings, advances and payments from the Singapore companies mentioned and a joint account, which left that account with a debit balance, collected enough to purchase US$200,000 in cash. 16. On 16th August she secretly took away their only child, an 8 year old daughter, and went to San Francisco. The Defendant then made a complaint to the police against Mr. X for enticing away the Plaintiff as a result of which a summons was issued against Mr. X, with consequent headlines in the press. The Defendant went to San Francisco and stayed with the Plaintiff for a month to effect a reconciliation. She asked for a house and picked one priced at US$700,000; he put a deposit on it. But he had to return to Singapore and the reconciliation failed. From the Hong Kong accounts he sent her US$700,000 for the house and a Mercedes car. All told he gave or sent her some US$927,000 (not including the US$200,000 she had purchased for cash). 17. For her part she refused reconciliation, refused to let him see their daughter, refused to give him her telephone number, and flooded him with lawyers' letters and later legal actions seeking to evict him from 38 Third Street, claiming shares, petitioning for divorce, demanding repayment of loans and inspect ion of accounts. 18. The Defendant seeks discharge of the mareva injunction and the order for discovery primarily on the ground of material non-disclosure. Manifestly, what may be termed as the matrimonial background relied upon in the Defendant's affidavits, was not disclosed. But, as Mr. Henry Litton Q.C. for the Plaintiff says, the Plaintiff comes to this court as the owner of property which she claims has been misappropriated by the Defendant and seeks protection of her proprietary rights. Clearly she is free to formulate her claim in that way, if she chooses, and to have that claim as so formulated adjudicated upon. But it does not necessarily follow that because her claim is so narrowly framed the matrimonial background is irrelevant in the context of the original applications to Rhind J and Deputy Judge Sharwood. 19. As to what the requirement for disclosure is, one need go no further than the recent judgment of Glidewell L.J. in Lloyds Bowmaker Ltd. v. Britania Arrow (1988) 3 All. E.R. 178 in which he sets out various familiar expressions of that requirement:
20. If it be thought that some uncertainty arises as to the required extent of disclosure of material facts, it is sufficient to say no such point was raised presumably because, in general, no disclosure at all of the facts in question was made, the issue being whether those facts were material. As to that, Fuad J.A. (as he then was) said in Citibank N.A. v Express Ship Management Services (1987) HKLR 1184; 1190D that:
21. But the picture is not complete without some reference to the dicta pointing out the nature of the principles requiring disclosure and emphasizing that they relate to material facts. In Wo Fung Paper Making Factory v. Sappi Kraft (Pty) Ltd (1988) 2 HKLR 346; 358, Hunter J.A. noted with approval the observations in point of Fuad V.P. and Macdougall J. (as he then was) in the Citibank case and went on to say that "disputed issues of facts simply go to the need for trial and are of very, very little value indeed in deciding whether a good arguable case has been made out. Furthermore it seems to me that the point has to be tested by looking at the substance". Similarly in Dormeuil v. Nicolian (1988) 3 All E.R. 197; 200, Sir Nicolas Browne-Wilkinson V.C. cited with approval the observations of Slade LJ in the Brinks-MAT case on the practical realities of making full disclosure. 22. Before I turn to the facts relied upon by Mr. Gilbert Rodway Q.C. for the Defendant, it is necessary to deal shortly with the point that it is not only non-disclosure that the Defendant relies upon, but also material misstatement. In the latter regard I accept that:
23. Also it must be noted that by and large the Defendant's version of the matter has not been contradicted by the Plaintiff although she has had ample opportunity to do so. 24. Reverting to the facts, before addressing them individually, it is helpful to consider the broad question of the Plaintiff's general omission of reference to the matrimonial background on the basis of the tactical position adopted i.e. that her claim was based on invasion of her proprietary rights and had nothing to do with matrimonial issues. Indeed it is submitted on her behalf that it is an abuse of the process of the court for the Defendant to drag in wholly irrelevant, scandalous and embarrassing matters, which have nothing whatever to do with the case. 25. However, the evidence points to the very substantial deposits in the Hong Kong bank accounts, totalling some HK$40m or so, being derived from the profits of the factories, companies and investments mentioned. Mr. Rodway's references to the deposits as family or matrimonial assets were attacked by Mr. Litton who demonstrated on the authority of Pettitt v. Pettitt (1970) AC 777 (H.L.(E)) that there was then no such concept of family property in our claw. However, the Matrimonial Proceedings and Property Act, 1970, which came into operation subsequently, in conferring upon the courts power to transfer the assets of one marriage partner to the other, has totally altered that position. Although technically misleading, as Lord Denning said in Watchel v. Watchel (CA) (1973) Fam 72; 90; 91:
So that although assets may belong to one of the parties, under the Matrimonial and Proceedings Act 1970 the court may transfer them to the other. The material provisions of that Act have been re-enacted in the Matrimonial Proceedings and Property Ordinance (Cap. 192) and came into effect in 1972. Section 7(1) requires the court, in making such dispositions of property to have regard to, inter alia, the conduct of the parties and all the circumstances of the case including the income, property and other financial resources which each party has or is likely to have (para. (a)) the financial needs which each party has or is likely to have (para. (c)) and the contributions made by each party to the welfare of the family (para. (f)). 26. But until a court makes such transfers, are not the proprietary rights of the 2 parties to the accounts held in their joint names in equal shares, in the absence of any agreement to the contrary, as contended by Mr. Litton for the Plaintiff? In the circumstances of this case, I think not. The Defendant has already indicated his claim to potentially more than 50% of the deposits and intends to plead that at the appropriate stage. It is possible that what may be determined to be the Plaintiff's assets or the assets she is to retain, will not exceed that part of the "family assets" she already has in her sole possession. Upon that basis it seems to me that the matrimonial background is material, in terms of substance, to the issues in the 2 summonses upon which the mareva injunction and the order for discovery were obtained, in particular to whether the Plaintiff had a good arguable case. It should therefore have been in the scales. 27. That conclusion is sufficient to determine the issue. Nevertheless turning quickly to some individual facts encompassed by that background, which were not disclosed or which were misstated, in my judgment, the omission to mention the following facts was material non-disclosure:
28. There was also a note the Plaintiff prepared for her Hong Kong solicitor suggesting that all the deposits belonged to the Defendant. That should also have been disclosed. No question of privilege was taken as the note was apparently sent to the Defendant by the Plaintiff's solicitor with her authority. That the Plaintiff may have been emotionally overwrought when she wrote it and partly under the influence of alcohol (and therefore, as contended on her behalf, not actually have been conceding the Defendant's entitlement to the deposits) is beside the point. The matter should have been placed in the scales. 29. Although from what I have already said, it will be seen that the conduct of the parties would be relevant in the apportionment or transfer of "family assets" albeit to a minor degree, I do not propose to have regard to conduct not directly concerned with the "family assets"; the prejudicial effect of the allegations of improper matrimonial conduct, which in any ease are disputed, outweigh their value. 30. I turn next to the Plaintiff's statement that to the best of her information and belief, "the Defendant is now residing in Hong Kong at ..... Hillwood Road, ..... within the jurisdiction of this Honourable Court". That incidentally, is to be contrasted with her statement that "I am now residing in the U.S.A. on a temporary basis". The evidence points to the Defendant having resided in Singapore almost continuously since 1968 when he first went there. His business is there and there is no evidence of his residing in Hong Kong since 1971 apart from visits to Hong Kong. In her divorce petition to the Singapore courts, affirmed on oath on 30th January, 1989, only four days before her affirmation in support of her application for the mareva injunction, the Plaintiff stated that she resided in the United States and that "the respondent, a director resides at No. 38 Third Street, Singapore". She added "that both the petitioner and the respondent are Singapore citizens and domiciled in Singapore". The only conclusion that can be draw is that her statement in her affirmation that the Defendant resides in Hong Kong is both untrue and wilful. But I have some doubt as to whether it was material to the application for the mareva injunction; whether or not the Defendant was residing in Hong Kong would not necessarily be material to the grant of that injunction. However, it seems to me that whether or not the Defendant resided in Hong Kong must in some degree have been material to the granting of an order to make discovery on oath and to file an affirmation within 14 days setting out in full the whereabouts and trace of the money withdrawn or transferred from the bank accounts. 31. It should be said in relation to the summons upon which Deputy Judge Sharwood made his order, that it was presented as an "inter-partes summons". However, the Plaintiff chose to serve it by leaving it at the Hillwood Road residence. The probabilities are that the Defendant was not in Hong Kong and would not have received it in time. Certainly he was absent at the hearing. In those circumstances the order made by Deputy Judge Sharwood can only be regarded as an ex-parte order, requiring full and frank disclosure. 32. To proceed to the next ground relied upon by Mr. Rodway in support of the application to discharge the injunction and order, this was that those orders were not necessary as the Plaintiff had received about HK$5.5m. I am not persuaded that this is a good ground for discharging the orders since the mareva injunction was primarily directed to preservation of the property, and the Plaintiff's claim could well exceed the HK$5.5m she has received. On the other hand, the evidence is that the Defendant has carefully preserved all the deposits, albeit in his own name, and even increased them, with the exception of one deposit that has bee used in connection with the Indonesian factory (which must be regarded as a "family asset"). Accordingly, it does not seem to me that there is any real risk of disposal or removal from the jurisdiction of the monies in question. For that reason also, in my view, the orders should be discharged. 33. In addition, Mr Rodway submits that the orders as drafted by the Defendant's solicitors are deficient and unconscionably harsh, as no right of set-off to the banks has been provided for, nor any undertaking to indemnify third parties. And finally, that although the Plaintiff has possessed herself of some HK$5.5m, the order allows the Defendant only $250,000 a month. I will say only that had the orders been continued, these matters could quite easily have been dealt with by appropriate amendments to the orders and I would have so ordered. 34. Finally, it is not disputed that material non - disclosure and material misstatement do not mean automatic discharge of the relevant ex-parte orders, and that the court does have a discretion whether or not to do so (e.g. see Brink's-MAT Ltd. v Elcombe and Brothers (1988) 3 All ER 188). As to the exercise of that discretion. I have been taken by counsel to authorities that point to its exercise in opposite directions. It is pertinent at this point to mention Mr. Litton's point that in disclosure there had to be a cut-off point or the Plaintiff would be involved in endless disclosure of matrimonial background details, impractical and oppressive in volume and detail and going back to the beginning of the association of the parties and even beyond. However, I do not think that would have been necessary. Disclosure, of the main points I have dealt with in the sort of detail that has emerged, would in my view be adequate and by no means oppressive. As to that, moreover, there is helpful dicta to which I have already referred in the judgments of Macdougall J. (as he then was) in Citibank N.A. v Express Ship Management Services Ltd. and Another (178) HKLR 1184, 1191; 1192, that, common sense must prevail, and more recently in the judgment of Sir Nicholas Browne - Wilkinson V. C. in Dormeuil v Nicolian (1988) 3 All ER 197; 200, adopting the view of Slade L.J. in the Brinks - MAT case that the practical realities of any case before the court cannot be overlooked. 35. On the other hand, the non-disclosure is material and, in my view, no less deliberate because it resulted from the strategic decision taken by the Plaintiff's advisers. Very relevant to that is the dictum of Fuad J.A. (as he then was) in intercontinental Housing Development Ltd. v Quek Teck - Huat and others (1986) HKLR 1153; 1162 that it is difficult to envisage circumstances in which it could ever be proper to exercise the court's discretion in the applicant's favour by granting fresh relief and, I observe, not merely discharging the mareva injunction in that case. Also to be borne in mind is the misleading impression conveyed by the Plaintiff's affidavit to support her pleaded case. The matrimonial background is suppressed and the Singapore setting played down. In para. 6 of the Plaintiff's affidavit she says "as a token of good faith and trust to the Defendant demonstrated by me, instructions were given to these bankers that any one signature of the Defendant or myself would be sufficient to deal with in any way these deposits or anyone of them." The intended implication seems to be that she put in the money whereas the evidence points to her husband have opened the accounts and made the deposits. I have already dealt with her statement that the Defendant was residing in Hong Kong. 36. In the light of the foregoing and all the circumstances, there is clearly no good reason why I should exercise my discretion against the orders being discharged. On the contrary, it seems very clear to me that they should be discharged. 37. I turn then to the remaining application of the Defendant, i.e. that this action and all further proceedings in relation thereto be stayed until further order. 38. Although it does not expressly say so and was rightly criticised on that account by Mr. Litton, the application founds upon the forum non conveniens principle. It is clear since Spiliada Maritime Corporation v. Cansulex Ltd. (1986) 3 WLR 972; 985G that upon an application for stay founded upon the ground of forum non conveniens the court has to ask itself: Is there some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice? (The Adhiguna Meranti (1987) HKLR 904; 907E) 39. Turning to the facts, as I have said, the Plaintiff's claim is framed in tort for the wrongful conversion of her property. It is contended that the tort took place in Hong Kong, that the Defendant has admitted conversion and that the monies by and large are also still within the jurisdiction. However, the crucial question seems to me to be whether the Plaintiff was and is beneficially entitled to a half share in the deposits. On her behalf it is urged, as I have said, that as one of the two persons in whose names the accounts were held, prima facie she is entitled to one half in the absence of any agreement to the contrary. There is, of course, no suggestion of such an agreement. But what is contended on the Defendant's behalf is that the deposits are or were paid in from "family assets" in the sense already mentioned and that the parties respective shares can only be determined, and indeed must be determined under the law applicable to "family assets". That, in my judgment, is clearly an issue that has to be tried and one that cannot be Shut out by the Plaintiff simply taking a strategic decision to present her case as a claim for wrongful conversion. As I understand the Defendant's case, it is not that the Plaintiff has no share, but that her share should be determined in accordance with the law applicable to apportionment or transfer of "family assets" taking into account all those assets and including the substantial sums and assets she has already received or taken into sole possession. It is clear that that is to be brought into issue by the Defendant if the proceedings are not stayed; indeed it already has been by the Defendant's affidavits which at the present stage of the action must be regarded as setting out his defence. It would therefore be unreal and, in my view wrong to regard this case as merely one of wrongful conversion it will inevitably involve the questions not only of which party's assets the deposits are and in what proportions, but whether and what transfers should be ordered under the Matrimonial Proceedings and Property Ordinance (that being the law presently presumed to apply). 40. The narrow issue of conversion simpliciter is likely to be a simple and straightforward one. All the facts appear already to be on record and not to be disputed. Against that the questions of existing individual ownership of "family assets" and of transfer, if any, is likely to involve detailed examination of evidence going back to at least about 1972 when the parties first met, taking in the contribution each made over the followings years, and the earnings and profits of the several companies, investments, and assets. The parties individual conduct and other circumstances are also likely to be canvassed. All that occurred almost totally in Singapore, and the witnesses, records and virtually all the other evidence is to be found there. 41. There is no question that the courts of Singapore are an available forum. Both parties are domiciled in and are citizens of Singapore, above all they are residents of Singapore and have been since about 1972 or 1973. In her own statement the Plaintiff only claims to be now temporarily in the United States. 42. The parties have no real association with Hong Kong. The Defendant had not been here long before he left for Singapore in 1968 settling there in 1971. He now has no significant connection with Hong Kong. No significance in this regard attaches to the Hillwood Road property or the bank deposits being located in Hong Kong. 43. Manifestly, therefore, in the light of all the foregoing, Hong Kong is not the natural or appropriate forum for the trial. Equally clearly and distinctly Singapore is the more appropriate forum than Hong Kong. 44. Those conclusion are fortified, I think by yet another factor i.e. the subsistence in Singapore of the earlier proceedings for divorce instituted by the Plaintiff. They are in the nature of a lis alibi pendens, notwithstanding that the action in Hong Kong is for wrongful conversion and that in Singapore for divorce and maintenance. As I have explained not merely similar but common issues will arise. "The same principle" i.e. forum non conveniens "is applicable whether or not there are other relevant proceedings already pending in the alternative forum ...... the existence of such proceedings may, depending on the circumstances, be relevant ......" per Goff L.J. in de Dampierre v. de Dampierre (H.L. (E))(1988) 1 AC 92; 108C. Having regard to the fact that it was the Plaintiff who instituted those proceedings, that they are most likely to be concerned with some of the same and other similar issues as the Hong Kong action and that any maintenance awarded will take into account the capital assets of each party (Daubney v. Daubney (1976) FAM 267) it seems to me that the existence of the earlier Singapore proceedings is another powerful factor in support of a Stay. 45. But that does not yet dispose of the matter, for the further questions must be asked : will a trial at that other forum i.e. Singapore deprive the Plaintiff of any "legitimate personal or juridical advantages"? If so, the court has to balance the advantages of the appropriate forum against the deprivation of the legitimate personal or juridical advantages. Deprivation of the latter will not necessarily be decisive. The court must satisfy itself nonetheless that "substantial justice will be done in the available appropriate forum". (Spiliada p482 Adhiguna Meranti p. 907) 46. Turning then to the question of whether a trial in Singapore will deprive the Plaintiff of any legitimate or juridical advantage, I have not been made aware of any such advantage. The only suggestion made was that in the matrimonial proceedings in the Singapore court, upon the required assumption that Singapore law is the same as Hong Kong law, the question of the "fairly assets" would only be dealt with, if that court decides to decree a divorce, which it might not. The answer to that, is that that eventuality seems unlikely in the particular circumstances, and if nevertheless it does happen, it will be possible for the Plaintiff to resume her action, which would only be stayed. Furthermore, since the bank deposits are "family assets" it seems to me it would be unjust to allow the Plaintiff to shut out the potentially legitimate claims of the Defendant to possibly more than 50% of the bank deposits by bringing a limited action in Hong Kong (see de Dampierre v. de Dampierre pp. 101-103). Indeed that course seems to me to verge upon abuse of the process of this court. I would add in any case that there is no suggestion that substantial justice would not be done in the Singapore court. 47. It follows therefore that the Singapore courts are clearly the appropriate and natural forum for the trial of the action, in which the case may be tried more suitably for the interests of all the parties and the ends of justice, and that the action must be stayed. That, I would add, is yet another reason why the orders of Rhind J. and Deputy Judge Sharwood should be discharged. 48. There will be judgment accordingly for the Defendant discharging those orders and staying the Plaintiff's action. 49. I will now hear counsel on costs.
Representation: Mr. Henry Litton, Q.C. & Mr. Pedruco instructed by Messrs. Lee, Ma & Wong for Plaintiff. Mr. Gilbert Rodway, Q.C. & Miss Audrey Eu instructed by Messrs. Liu, Chan & Lam for Defendant. |