Wan v. Lai
Read the full judgment text of FCMC 11943/2003 on BabelCite. This Family Court judgment was delivered on 15 February 2007 before Deputy District Judge Chan Chan-kok.
District Court – Matrimonial Causes – Charging Order – Beneficial Interest – Loan Agreement – False Declaration – Ancillary Relief – Whether husband holds beneficial interest in matrimonial home – Whether charging order nisi should be set aside – Distribution of property interests – Husband found to hold beneficial interest but wife's contributions and husband's behaviour considered – Charging order set aside due to irregular judgment obtained by finance company via false declaration – Husband's interest in home transferred to wife at no consideration – Costs orders made against finance company and husband.
Legal issues: Beneficial Interest in Matrimonial Home · Charging Order Nisi · Distribution of Property Interests
Outcome: Charging order nisi set aside; Husband's title and interests in former matrimonial home transferred to Wife at no consideration; Costs orders made.
Cited by 3 cases · Cites 1 case
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[English Translation – 英譯本] FCMC 11943/2003 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 11943 OF 2003 ________________________ BETWEEN
________________________ DCCJ 5186/2005 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 5186 OF 2005 ________________________ BETWEEN
________________________ (The two cases were heard together in Chambers pursuant to the order Coram: Deputy District Judge Chan Chan-kok in Chambers (not open to public) Dates of Hearing: 1, 13-15 September 2006, 14 November 2006 and 22 January 2007 Date of handing down Judgment: 15 February 2007 ______________ JUDGMENT ______________ 1.This trial concerns two sets of proceedings: (1) Matrimonial Causes No. 11943 of 2003 (“FCMC 11943/2003”); (2) District Court Civil Action No. 5186 of 2005 (“DCCJ 5186/2005”). 2.As the two sets of proceedings involved the same subject matter, Master Tracy Chan of the District Court ordered on 20 March 2006 that the two cases be tried together. 3.Before the trial commenced, the legal representatives of the relevant parties prepared two different sets of bundles, which will be referred to hereinafter as “FCMC bundle” and “DCCJ bundle” respectively. FCMC 11943/2003 4.The petitioner in FCMC 11943/2003 is Madam Wan (hereinafter “the wife”), and the respondent is Mr. Lai (hereinafter “the husband”). The husband is also the defendant (judgment debtor) in DCCJ 5186/2005. 5.The wife and the husband got married in 1979. 6.Following their marriage, they gave birth to two sons, who are now aged 24 and 18 respectively and residing together with the wife at a flat in Lung Poon Court, No. 8 Lung Poon Street, Kowloon (hereinafter “the former matrimonial home”). 7.On 6 October 2003, the wife issued a petition for divorce on the ground of the husband’s unreasonable behaviour. The petition was not contested by the husband. On 17 May 2004, the Court granted a decree nisi of divorce and, as she was seeking maintenance for herself and the two sons as well as an order for the transfer of the former matrimonial home, adjourned the hearing of her application for ancillary relief. 8.Following a number of call-over hearings, the ancillary relief being applied for is now confined to the following two items: (1) nominal maintenance of $1.00 per annum; and (2) transfer of all the husband’s title to and interests in the former matrimonial home to the wife for no consideration. The former matrimonial home 9.The former matrimonial home is a flat under the Home Ownership Scheme administered by the Housing Authority. 10.In 1986, the parties applied for the purchase of a flat under the Home Ownership Scheme by way of a “Green Form” (for use by tenants of public housing units) and successfully purchased the former matrimonial home at $292,800, which they hold as joint tenants. 11.The wife made a downpayment of $29,280 for the purchase of the former matrimonial home, whereas the balance of $263,520 was paid with a mortgage loan obtained from the Hong Kong Bank. It is not in dispute that the mortgage loan has now been repaid in full. 12.The parties agreed at the hearing that the current market value of the former matrimonial home is $1,500,000. 13.The wife is at present residing at the former matrimonial home with her two sons, both of whom are still attending school. DCCJ 5186/2005 14.On 29 September 2005, the husband borrowed a sum of $230,000 from a finance company (hereinafter the “finance company”). The parties executed a loan agreement (see page 114 of the FCMC bundle), which shows that the agreed repayment period was 14 days, meaning that the entire loan and interest totalling $233,659.80 was to be repaid on 13 October 2005 at one go. 15.On the basis of the husband’s alleged failure to repay the loan on 13 October 2005 pursuant to the agreement, the finance company by writ of summons commenced proceedings in the District Court against the husband on 21 October 2005, claiming the following:
It is this District Court action that DCCJ 5186/2005 is about. 16.The husband did not file a defence in DCCJ 5186/2005. On 4 January 2006, the District Court entered judgment for the finance company (hereinafter “the DCCJ Judgment”) and ordered the husband to pay:
17.On 1 February 2006, the finance company obtained a charging order nisi (Charging Order: Notice to Show Cause) against the former matrimonial home. 18.Upon becoming aware of the action in DCCJ 5186/2005, the wife opposed the finance company’s application for a charging order absolute. In the circumstances, the Master of the District Court ordered that the finance company’s application for a charging order absolute and the wife’s opposition thereto be heard together with the wife’s application for ancillary relief in FCMC 11943/2003 in the Family Court. The issues 19.Having regard to all the evidence in the two sets of proceedings, I am of the view that the issues to be determined are as follows:
The wife’s evidence 20.The wife elected to give evidence in court. She made it clear at the outset that she was merely requesting her husband to do two things:
21.The wife made it clear that she was not seeking payment by the husband of the living or educational expenses of the two sons. 22.According to the wife, she has been a teacher for the past 30-odd years, enjoying stable working conditions and earnings. On the contrary, the husband is an unrealistically ambitious person. He is preoccupied with running a business and becoming a boss and is not interested at all in taking up an ordinary job. 23.Shortly after the marriage, the wife helped finance the husband’s stationery business by giving him $10,000. She also lent him $60,000 in 1989 to enable him to go to Singapore to learn the trade of jewellery. Both of these attempts, however, failed in the end. 24.Since their marriage, the husband had never given living expenses to the wife on a regular basis. Between 1988 and 1989, when he worked as a taxi driver, he seldom gave the wife living expenses and sometimes had even borrowed money from the wife’s mother in order to sustain a livelihood. 25.In early 1986, the wife decided to apply, by means of the green form, for a flat under the Home Ownership Scheme so as to better protect herself and the children. As the application was made by means of the green form, the public housing unit, of which the husband was at that time the registered tenant, had to be surrendered. The husband did not object to the application but made no financial contribution whatsoever for the purchase of the flat under the Home Ownership Scheme. In other words, the downpayment and all expenses, decoration fees and mortgage payments were borne by the wife alone. The wife said that life was rather hard for her during that period as her monthly income then was only $8,000-odd and, apart from the monthly mortgage repayment of $2,000, she had to bear all the household expenses. 26.In 1993, the husband carried on a jewellery business in Mainland China. He asked the wife for money to fund his business whenever he returned to Hong Kong. As a result of these constant demands, the wife gave him more than $160,000 between February and December 1993. 27.The wife further said that when she found out the husband’s extra-marital affair in 1995, their relationship turned sour. She forbade the husband to return home and went as far as changing the door lock. Initially, the husband repeatedly attempted to return home to cause disturbance. As all those attempts failed, he no longer returned to the former matrimonial home, but on 1 September 2003, he began to cause disturbance at the school where the wife worked. 28.The wife contends that during the subsistence of the marriage, the husband had never fulfilled his responsibilities as a husband and father, nor had he made any contribution to the family or the former matrimonial home. More importantly, when she purchased the former matrimonial home with her own resources in 1986, she and the husband had no common intention to hold the beneficial interest of the property jointly. Hence her view is that the husband should not be entitled to any beneficial interest in the former matrimonial home. She also submits that the finance company’s application for a charging order should be dismissed as the husband has no beneficial interest in the former matrimonial home. Furthermore, she contends that the judgment that the finance company has obtained in DCCJ 5186/2005 is invalid and therefore, even if the husband does have a beneficial interest in the former matrimonial home, the finance company’s application for a charging order should still be dismissed. The husband’s evidence 29.The husband elected to give evidence. 30.The husband described himself as a rather reticent person. He said that the wife played a dominant role during the subsistence of the marriage as she possessed better academic qualifications and earned a higher income than he did. He also agreed that all the downpayments, decoration fees, mortgage payments, etc were solely borne by the wife. However, he disagreed with the contention that he had made no contributions whatsoever to the family. He said he had made the following contributions:
31.On the basis of the said contributions and the fact that he and the wife hold the former matrimonial home as joint tenants, the husband contends that he is entitled to one-half of the beneficial interest in the former matrimonial home. 32.Regarding the finance company’s application for a charging order absolute, the husband has indicated that he has no objection thereto. 33.When cross-examined by counsel for the wife on the debt he owed the finance company, the husband testified as follows:
The finance company’s evidence 34.The finance company called two witnesses at trial:
Mr. Chan’s evidence 35.Mr. Chan is a former litigation clerk of Messrs. Hagon Wai & Partners, solicitors for the finance company. He mainly testified on how he served the writ of summons in DCCJ 5186/2005 on the husband. His evidence includes:
36.Mr. Chan was subject to meticulous cross-examination by counsel for the wife. The questions put by the counsel show that the wife challenged the validity of the service of the writ of summons in DCCJ 5186/2005 by the solicitors for the finance company on the husband. If this challenge succeeds, the legality of the DCCJ Judgment will be called into question, and the court should set aside the charging order obtained pursuant to the questionable judgment. Mr. Law’s evidence 37.Mr. Law is the general manager of the finance company. 38.Mr. Law made and filed an affirmation on 18 November 2005 (which was less than one month after the writ of summons was issued) in support of the finance company’s application for judgment in its favour in DCCJ 5186/2005 (see DCCJ bundle pages 1-5). His main evidence includes:
39.I have set out the contents of Mr. Law’s affirmation in considerable detail because, as can be seen from the evidence he gave under cross-examination in court, what he stated in his affirmation is incorrect in many respects. 40.Under cross-examination, Mr. Law said when the husband and a friend approached the finance company to apply for a loan, the husband did indicate that he was the owner of the former matrimonial home. Mr. Law made an inspection at the housing estate in which the former matrimonial home was situated, although he did not actually go inside the former matrimonial home. He firmly denied the statement that counsel for the wife put to him, namely that the agreement initially entered into between the finance company and the husband was for a loan repayable by instalments spanning 48 months. He insisted that the loan period was 14 days and that the former matrimonial home was not intended to be pledged as security for the loan. 41.Mr. Law further explained that, when the loan became due on 13 October 2005, the husband failed to repay the loan and interest accrued thereon in the sum of $233,659.80 pursuant to the loan agreement. On 21 October 2005, after the finance company had commenced proceedings in DCCJ 5186/2005, the parties entered into a composition whereby the husband was to repay the outstanding loan by 48 instalments in the sum of $9,487 each, such repayment to commence from 28 October 2005 and thereafter on the 28th day of each month until 28 September 2009. 42.This so-called composition plainly came into being before 18 November 2005 when Mr. Law made his affirmation. More importantly, as Mr. Law conceded in court, the husband had paid the monthly instalments of $9,487 pursuant to the composition. According to Mr. Law, the husband had paid three instalments on 31 October 2005, 2 December 2005 and 10 February 2006 respectively. In other words, when Mr. Law made the affirmation on 18 November 2005, not only did he fail to truthfully disclose that the finance company had made a new agreement with the husband regarding repayment, he also did not disclose that the husband had at least paid one instalment of $9,487 by then. Rather, Mr. Law still deposed that the husband had not repaid any part of the loan and that the total sum owed by the husband was $233,659.80. 43.Concerning this discrepancy, Mr. Law’s explanation was that when he made his affirmation on 18 November 2005, he did not see anything wrong with its contents, and that he did not consider it necessary to disclose to the court the relevant composition and the fact that the husband had started to repay part of the loan pursuant to the composition. 44.Mr. Law’s explanation is in my judgment hardly convincing. He is a senior executive of a finance company, and presumably this is not the first time he deals with legal actions against debtors. Coupled with the fact that he was assisted by the solicitor acting for the finance company, he could not possibly be unaware of his duty to provide the court with truthful and accurate information in respect of the debt recovery action. More importantly, Mr. Law not only concealed some of the information (namely the said composition), but also stated categorically in paragraphs 6(e) and 9 of his affirmation that the husband had never repaid any part of the loan up to the date of the affirmation (i.e. 18 November 2005). This, in my view, was obviously done to mislead the court. The law regarding an application for a charging order 45.Having obtained the judgment from the District Court in the absence of the husband, the finance company applied for a charging order pursuant to section 52A of District Court Ordinance, Cap. 336 of the Laws of Hong Kong, the relevant provisions of which are extracted below:
46.As can be seen from the aforesaid provisions, the fact that the finance company is the judgment creditor in DCCJ 5186/2005 does not mean that it can obtain as of right a charging order against the property of the judgment debtor (i.e. the husband). In deciding whether to exercise its discretion to issue the relevant charging order, the court is under a duty to consider all the circumstances of the case. 47.Furthermore, section 52AA of the District Court Ordinance makes provisions as to the property which may be charged:
48.In other words, the finance company can only request the court to exercise its discretion to issue a charging order against the interest held by the husband beneficially in the former matrimonial home. 49.All the three parties to the present case have not disputed the interpretation of the aforesaid provisions. Therefore, in determining the finance company’s application for a charging order, I have to consider the following:
50.As is clear from the House of Lords decision in Pettit v Pettit [1970] AC 777, the following legal principles are to be applied in determining whether the husband holds any beneficial interest in the former matrimonial home:
51.Applying the abovementioned legal principles, I will now consider the husband’s beneficial interest in the former matrimonial home. Does the husband hold any beneficial interest in the former matrimonial home? 52.On this issue, I set out below the salient facts which are not subject to serious dispute:
53.A clear conclusion that can be drawn from the above facts is that the funds needed for purchasing the former matrimonial home, including the downpayment, decoration fees and mortgage payments, were all supplied by the wife. The husband argued in court that when he worked as a taxi driver between 1986 and 1989, he did give part of his income to the wife as living expenses. For the following reasons, however, I am not satisfied that he had made direct financial contributions to the purchase of the former matrimonial home:
54.It follows that, judging solely from the amount of money he contributed, I am of the view that the husband is prima facie only a trustee notwithstanding the fact that he was a joint owner of the former matrimonial home. 55.Nevertheless, as has been pointed out in Pettit v Pettit, in most cases where assets are held jointly by a couple, it is difficult for the court to resolve all disputes by relying solely on the concept of trust. A more important consideration is the agreement or common intention between the parties at the time of purchase of the property in question. If there was an express agreement between the parties at the time of purchase, the court should rule on the issue of beneficial interests in accordance with that agreement. However, as is very often that the case, when a couple purchase a matrimonial home in joint names, they will not make any express agreement in respect of the beneficial interests or may even take no heed of this issue at all. In such a case, the court must look at the objective facts of the case as a whole and consider whether any agreement between the parties can be inferred. 56.In considering the agreement between the parties, I shall first consider the contents of the conveyancing documents executed by the parties when they purchased the former matrimonial home, in order to ascertain whether they made any arrangement regarding the beneficial interests at the time of the purchase. 57.The conveyancing documents produced by counsel for the wife upon the request of the court include:
58.Clause 4 of the Legal Charge (exhibit P3) executed by the mortgagee bank and the two parties to this case provides as follows:
59.It is clear from the above clause that, upon purchasing the former matrimonial home, the husband and the wife as beneficial owners thereof charged the property to the mortgagee bank. 60.Counsel for the wife submitted that in Po Kwong (China) State Limited v Cheung Wai Wah trading as Axis Zone Interior Design (CACV no. 157 of 2004, date of judgment: 16 November 2004), the Court of Appeal held that where the relevant claim was not founded on the deed, the principle of estoppel by deed would not apply. In the present case, as the action is not founded on the relevant Legal Charge, the finance company cannot rely on the contents of clause 4 of the document to prove that the husband is one of the beneficial owners. 61.Counsel for the wife also submitted that all documents and details relating to the sale and purchase of the former matrimonial home, which was a flat under the Home Ownership Scheme, were prescribed by the Housing Authority. As can be seen from the Deed of Guarantee (exhibit P5) executed by the Hong Kong Government and Hong Kong Bank, the Government had stipulated the contents of the document of the Legal charge of the property under the Home Ownership Scheme (see exhibit P5, annex 3). Clause 4 of the document expressly provides that the borrowers as beneficial owners charged the property to Hong Kong Bank. Furthermore, there is evidence that no one explained to the wife the contents of the legal charge in detail when she executed it, and that she was unaware of clause 4 of the document pertaining to beneficial interests. For these reasons, counsel submitted that the contents of the legal charge provided limited assistance in determining whether the husband held any beneficial interest in the former matrimonial home. 62.I agree that the principle of estoppel by deed does not apply in the present case. However, the undisputed fact is that the wife and the husband charged the former matrimonial home to the mortgagee bank in the capacity of beneficial owners. I appreciate that the wife might not be aware of this particular fact when she executed the legal charge and that, even if she was aware of that fact, she might not understand what that capacity meant. However, it does not follow that she is not bound by the contents of the document. In my view, the contents of this document must be taken into account together with all the other circumstances of the case in resolving the issue of beneficial interests. 63.Having considered all the circumstances of the case, I arrive at the inference that the husband does hold beneficial interests in the former matrimonial home. 64.Apart from the fact that both the husband and the wife claimed in the legal charge that they were beneficial owners, I also notice the wife’s testimony in which she admitted that when they purchased the former matrimonial home in 1986, although there was no discussion on the beneficial interests in the property, she was on relatively good terms with the husband and had never contemplated a divorce. She further admitted that the purchase of the former matrimonial home was made in order to provide both parties with protection in future. In paragraph 18 of her affirmation dated 14 August 2006 (see page 65 of the affirmation section of the FCMC bundle), the wife deposed as follows:
65.If in 1989 the wife wished to maintain a relationship with the husband whereby he would “be with [her] whether for weal or woe” and they would “be together both in joy and in sorrow”, then it is difficult to imagine that in 1986 she would have objected to co-owning the beneficial interests in the former matrimonial home jointly with the husband. 66.From the said objective circumstances, I can infer that the common intention between the parties at that time was to jointly hold the beneficial interests in the property. 67.Having found that the husband does hold beneficial interests in the former matrimonial home, I now proceed to consider the extent of the husband’s beneficial interest. 68.In the above-cited case of Pettitt v Pettitt, Lord Morris of Borth-y-Gest applied a principle established in other cases, namely: where it is not possible to calculate the precise ratio of the husband’s and wife’s beneficial interests, it will be fair to rule that such interests are held by the two of them in equal shares (see 803 to 804B). 69.In the present case, as the husband and the wife are joint owners and their common intention has been “to be together in weal”, I hold that the aforesaid legal principle applies. Accordingly, I hold that the husband holds one half of the beneficial interests in the former matrimonial home. Should the charging order nisi be set aside or made absolute? 70.In deciding whether the charging order nisi obtained by the finance company against the former matrimonial home should be set aside or made absolute, I must first consider whether the judgment obtained by the finance company in DCCJ 5186/2005 is a regular judgment. 71.Counsel for the wife has challenged the regularity of the judgment on the following two grounds:
72.The wife’s case is that she is not seeking to set aside the judgment in DCCJ 5186/2005, as she is not a party to that case. She is merely seeking to establish to the satisfaction of the court that the judgment in DCCJ 5186/2005 is not a regular judgment, in the hope that I will then exercise my discretion to set aside the charging order nisi. Service of the writ of summons in DCCJ 5186/2005 73.On the issue of the service of the writ of summons in DCCJ 5186/2005, the finance company has called Mr. Chan, a former litigation clerk at the solicitors’ firm acting for that company, to give evidence. 74.Mr. Chan was subject to in-depth cross-examination by counsel for the wife. His evidence is essentially that he put the relevant litigation documents into the mailbox of the former matrimonial home on 21 October 2005. 75.I noticed that when Mr. Chan was cross-examined by counsel on the exact location of the housing estate in which the former matrimonial home was situated and the route he took, he was unable to give detailed evidence. That said, I also have to take into account that, as the service of the writ of summons in DCCJ 5186/2005 took place more than one year ago, the omission by Mr. Chan of certain geographical details should not be surprising. Furthermore, I can see no motive for Mr. Chan to give false evidence, and the husband has not disputed the service of the writ of summons. I am satisfied on a balance of probabilities that the writ of summons in DCCJ 5186/2005 was successfully served on the husband. Did the finance company make any false declaration? 76.I now turn to the question of whether the finance company made any false declaration in applying for and obtaining judgment in its favour in DCCJ 5186/2005. 77.The bulk of the evidence of the finance company comes from its general manager Mr. Law. I have referred to his evidence from paragraphs 37 to 44 of this Judgment, and I am satisfied that, in his affirmation that has been filed with the court, he misled the court on the question of whether the husband has repaid the loan (see paragraph 44). 78.Having considered and analyzed all the evidence including that of Mr. Law and the husband, I am further satisfied that when the husband contacted Mr. Law and executed the relevant loan documents on 29 September 2005, their agreement was that the husband was to repay the loan of $230,000 by 48 monthly instalments in the sum of $9,487 each. In other words, the husband’s loan was not one which merely covered a period of 14 days. 79.The husband’s stance in these proceedings is obviously that he will not contest any application made by the finance company, including its application for a charging order. His only objective in the divorce proceedings is to seek an order for sale of the former matrimonial home and obtain part of the proceeds of sale. I do not see any reason for him to give false evidence by insisting that the loan was repayable by 48 monthly instalments when it should be repayable in 14 days. I therefore also accept the husband’s evidence that he did not have a clear idea of the contents of the loan agreement (page 114 of the affirmation section of the FCMC bundle) when he executed it. 80.The above conclusion is also supported by a letter which the solicitors for the finance company prepared and arranged for the husband to sign on 29 September 2005, i.e. the date of the agreement between the husband and the finance company (see page 118 of the affirmation section of the FCMC bundle). The letter states as follows:
81.I would first like to discuss the loan agreement number. The loan agreement and the above letter show that the loan agreement number is “X20050929-1-48”. Obviously, this is not a random number, but one which serves to reflect some information about the loan. For example, the figure “20050929” after “X” indicates that the loan agreement was executed on 29 September 2005. By the same logic, what does the last figure “48” in the loan agreement number represent? Although none of the three parties has adduced any evidence in this respect, that figure is in my view at least consistent with the husband’s evidence that the loan agreement is one for a duration of 48 months. 82.I also note that, in the aforesaid letter, the address of the former matrimonial home appears under the item “Property”. This is consistent with the husband’s evidence that it was a mortgage loan, but not with Mr. Law’s version that the loan had nothing to do with the former matrimonial home. More importantly, the letter specifies that the loan of $230,000 was “secured by the above premises”, namely the former matrimonial home; and the letter describes the finance company and the husband as “mortgagee” and “mortgagor” respectively. 83.Furthermore, the loan agreement was executed on 29 September 2005. The finance company issued a repayment schedule (pages 116 to 117 of the affirmation section of the FCMC bundle). This document does not bear a date of issue, but states that the first instalment was to be paid on 28 October 2005 (i.e. a month after the loan was drawn down) and that thereafter the loan was to be repaid on the 28th day of each month, totalling 48 instalments. This is entirely consistent with the husband’s evidence. The document also states (see page 117) that “the minimum loan period is 12 months”. This serves to establish that the repayment schedule was issued at the time of the granting of the loan, namely 29 September 2005, and to refute Mr. Law’s testimony in court that the agreement of repayment by 48 instalments was merely a composition arrangement entered into on 13 October 2005 after the husband had violated the original loan agreement. 84.In conclusion, I do not have the slightest doubt that the loan in question is a “mortgage loan” repayable in 48 instalments. I also find that Mr. Law has lied in court. 85.Apart from claiming falsely that the loan was repayable in 14 days, Mr. Law has, as explained in paragraph 44 hereinabove, misled the court as to the outstanding sum at the relevant time. Mr. Law claimed in his affirmation that the husband had never repaid any outstanding sum. It is clear, however, that the husband had at least paid one instalment in the sum of $9,486 by 18 November 2005 when Mr. Law made his affirmation. This means the amount owed by the husband at that time could not possibly be $233,659.80 as stated in paragraph 7 of the affirmation. By the time of delivery of the judgment in DCCJ 5186/2005 (i.e. 4 January 2006), the husband had paid at least two instalments, and therefore the amount owed by the husband at that time was definitely less than $233,659.80. 86.As Mr. Law has supplied false information, the judgment obtained by the finance company on 4 January 2006 is an irregular judgment. Setting aside of the charging order nisi 87.As the above judgment is irregular, the charging order nisi is in my judgment unsound and hence should be set aside. Distribution of interests in the former matrimonial home between the wife and the husband 88.Finally, I have to consider the applications by the wife and the husband for ancillary relief (FCMC 11943/2003). Put simply, the question before me is the proper approach in distributing the interests in the former matrimonial home between the two parties. 89.In considering this issue, I have to take into account the provisions of section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 of the Laws of Hong Kong:
Income, earning capacity, property and other financial resources 90.The wife is a teacher earning a monthly income of $37,773. 91.Apart from the former matrimonial home and the money owed to her by the husband, her assets include:
92.Calculated on the basis of one half of the beneficial interests in the former matrimonial home, the wife’s interest in the property is $750,000 (the parties have agreed that the net market value of the former matrimonial home is $1,500,000). 93.The wife also said the husband has borrowed a total sum of $300,000 from her. 94.Adding up all the aforesaid items, the gross value of the wife’s assets comes to $4,706,745.12. 95.As far as the husband is concerned, his financial statement shows that his only asset is half of the beneficial interests in the former matrimonial home which he allegedly holds, the value of which is $750,000. His monthly income is $3,500. As the wife merely disputed the husband’s beneficial interest in the former matrimonial home and did not cross-examine him in detail on his income, I am satisfied that the husband’s current monthly income is $3,500. Financial needs, obligations and responsibilities 96.The wife is at present residing at the matrimonial home together with the two sons. 97.Although the elder son is already 24 years old and has obtained a bachelor’s degree in Mainland China, he will continue to study for a master’s degree and therefore still need the wife’s support. 98.The younger son is 18 years old and studying at the Hong Kong Academy for Performing Arts. He is also dependent on the wife. 99.The wife’s financial statement shows that the monthly household expenses are $27,724, which I consider reasonable for a family of three. 100.However, as can been seen from item 4.4 of her financial statement (page 17 of the affirmation section of the FCMC bundle), the wife anticipates spending $300,000 on the sons’ education in the coming year, i.e. an average of $25,000 per month. The husband has not mounted any challenge to the wife’s evidence in this respect. Taking into account the said monthly expenses of $25,000, I am satisfied that the wife’s monthly expenses will increase to approximately $52,000, which means the wife will incur an overdraft of approximately $15,000 per month. 101.As for the husband’s expenses, his financial statement (page 41 of the affirmation section of the FCMC bundle) gives a figure of $3,400. The statement also mentions that there will be an additional rental expenditure of $2,000 in future, which means the total expenses will be $5,400. I do not think that the expenditure of an individual can be anything below that figure. 102.Quite apart from this, the husband is still indebted to the finance company for approximately $230,000. Standard of living before breakdown of the marriage 103.I am satisfied that during the subsistence of the marriage, the wife was the major breadwinner of the family. They initially resided at a public housing unit and subsequently moved to a flat under the Home Ownership Scheme (i.e. the former matrimonial home) with an area of 579 square feet. They enjoyed a medium standard of living. Ages of parties and duration of the marriage 104.The wife and the husband are both 52 years old. 105.They got married in 1979. In 1995 the husband moved out of the former matrimonial home, which marked the commencement of the couple’s separation. The marriage lasted 16 years. Physical or mental disability 106.There is no evidence that either the wife or the husband suffers from physical or mental disability. Contributions 107.As regards contributions to the family, from a purely financial point of view I do not think there is serious dispute. The husband agreed in court that all downpayments, decoration fees and mortgage payments of the former matrimonial home were directly borne by the wife. I have also found that during the subsistence of the marriage, the husband’s only contribution was that he might have brought home $1,000 to $2,000 per month between 1986 and 1989 when he worked as a night shift taxi driver. In my view, however, the money was not even sufficient for meeting the cost of his own meals and other sundry expenses at home. Coupled with the fact that he sought financial assistance from his wife from time to time, I am satisfied that the husband made no substantial financial contribution to the family. 108.As regards other contributions, I note that during the subsistence of the marriage, the husband was in Singapore for a few years to do business. Since he left home in 1995, the wife has on her own shouldered the responsibility of taking care of the family. I also note that both of the sons, who were merely 13 and 9 years old when the husband left the family in 1995, are brought up by the wife single-handed. For these reasons, I find that the wife has made significant contributions to the family and, on the contrary, the husband’s contributions have been minimal. Behaviour and all other circumstances 109.Taking the evidence as a whole, I find that the husband is an irresponsible spouse. Rather than making significant contributions to the family, he has in fact become a burden to the family. 110.As can be seen from the documentary evidence, the husband has frequently asked the wife or her family members for money. The debts which he has by his own signature acknowledged include:
111.There is even some evidence (page 15 of the exhibits section of the FCMC bundle) that the husband had appropriated $70 which belonged to the son. 112.Furthermore, he “mortgaged” the former matrimonial home to the finance company for the purpose of obtaining more money for himself. 113.In my judgment, the husband’s said behaviour falls into the “obvious and gross” behaviour referred to in Wachtel v Wachtel [1973] 1 All ER 829. I shall take this into account when dealing with the applications for ancillary relief. Judgment 114.I have thoroughly considered the above factors, in particular:
115.In my judgment, a fair approach is to transfer all the title and interests of the husband in the former matrimonial home to the wife at no consideration. 116.It is in my view appropriate for the parties to have a clean break. I will therefore not make an order for periodic payment or nominal maintenance. Orders 117.For the above reasons, I now make the following orders: DCCJ 5186/2005
FCMC 11943/2003
Costs 118.I also order that the finance company and the husband shall jointly and severally pay all costs of the wife in DCCJ 5186/2005, including all costs reserved. The husband is to pay all costs related to ancillary relief in FCMC 11943/2003, including all costs reserved. As regards the costs of this 6-day trial, which involves two sets of proceedings, I consider it fair to order the finance company and the husband to pay - of such costs jointly and severally, and to order the husband to pay the remaining ¼ of such costs. All the aforesaid costs are to be taxed if not agreed. This is an order nisi which will become absolute in 14 days in the absence of any application for variation. The behaviour of the finance company 119.Finally, I must point out that the finance company’s behaviour in DCCJ 5186/2005, in particular the conduct of the general manager, is highly questionable. Such conduct includes:
120.I now request the Registrar of the Family Court to deliver a copy of this Judgment to the Registrar of Money Lenders and the Secretary for Justice for consideration and follow-up.
FCMC 11943/2003 Mr. Allen Lam, instructed by Liu, Chan & Lam, for the petitioner. The respondent in person, present. DCCJ 5186/2005 Ms Mabel Tsui, instructed by Hagon Wai & Partners, for the plaintiff (judgment creditor). The defendant (judgment debtor) in person, present. Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. Edmund Cham, Solicitor. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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