C v. T and Others
Read the full judgment text of FCMC 12488/2003 on BabelCite. This Family Court judgment was delivered on 3 June 2009 before Her Honour Judge Sharon D. Melloy.
Matrimonial Proceedings and Property Ordinance – Ancillary Relief – Setting aside dispositions – Family assets – Needs-based division – Maintenance – District Court – Wife transferred properties to children – Husband transferred assets to cohabitee – Court found wife intended to defeat claim for some properties – Court found husband did not intend to defeat claim for cohabitee assets – Assets included in schedule – Division based on needs rather than equality – Maintenance awarded – Costs order made
Legal issues: Power to set aside further dispositions · Wife's dispositions to children · Matrimonial assets status · Husband's dispositions to cohabitee · Division of assets · Maintenance
Outcome: Ancillary relief granted; certain dispositions set aside; assets divided based on needs; maintenance awarded.
Cited by 2 cases · Cites 2 cases
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FCMC 12488 / 2003 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 12488 OF 2003 ----------------------
---------------------- Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public) Dates of Hearing: 27 – 31 October, 3 - 7 November 2008 and 19 and 20, 26 and 27 and 30 March 2009 Written closing arguments submitted: 30 April 2009 Oral closing arguments: 8 May 2009 Date of Judgment: 3 June 2009 ---------------------- J U D G M E N T ---------------------- Introduction 1.This is an application by a wife for ancillary relief generally and for an order to set aside dispositions made by the husband to his cohabitee. The husband for his part has also issued an application to set aside transfers of properties made by the wife to the children of the family. He also seeks to set aside subsequent transfers made to a company called APL. 2.This case centres on a long, but not a particularly happy marriage spanning a period of some 39 years. In essence it is the husband’s case that the wife conspired with at least two, if not more of the five children of the family, in order to retain control of the family assets. The husband maintains that she did this out of revenge, given that he had sought solace with a third party. It is the husband’s case that the wife transferred certain family properties to the children and then a number of those on again, with the intent of ensuring that they remained out of his reach. 3.The wife maintains that certain properties were transferred to the children at the specific request of the husband, as a precursor to a marital reconciliation. She maintains that she now holds no assets and has no income. 4.The crux of the matter is whether or not properties now held in the names of children or APL, are really family properties, belonging beneficially to the husband and/or the wife. And in the event that they are family properties whether or not they are capable of being redistributed by the court? If not how else might the court properly regard these properties? 5.The wife claims that she now owns nothing and therefore she seeks half of the value of the Broadcast Drive Property - the one property that is still held in the sole name of the husband. She also seeks half of his monthly pension. 6.The husband for his part seeks a distribution of the family assets, which acknowledges that the children hold certain properties for and on behalf of the wife. He argues that these properties are a financial resource that the wife continues to control and to receive the benefit of. 7.There are two opposing camps. On the one side you have the petitioner wife, now aged 69 years old who is supported by 4 of the 5 children. They are joined in these proceedings as interveners. On the other, you have the husband, now aged 72, who is supported by his cohabitee, who is also joined in as an intervener to the proceedings. The issues 8.It seems to me that the following issues need to be determined by this court:
The applications 9.There are three substantive applications before the court as follows:
Background 10.The parties married on the 25 November 1963 and separated in or about September 2002. This is then a marriage of some considerable length. The husband was a civil servant and the wife a homemaker. She also worked in a paid capacity from time to time. The husband worked throughout the marriage until his retirement from the civil service in March 1997. He received a lump sum gratuity of approximately HK$5 million and a monthly pension of c. HK$33,000 per month. 11.The parties have five children as follows:
12.There was a falling out with D some years ago. He is believed to be living and working in the United States, with his wife and family. D has a doctorate in science but his present occupation is unknown. He is not one of the intervener’s. 13.All of the other four children are interveners, together with a BVI company called APL, which is owned by J and P. J, PY and P have all filed affirmations in these proceedings. PY is a medical doctor who lives and works in the United States with her husband. J, who has various academic qualifications, is presently living in Boston, where he is a student in a health care programme. P is said to be both a qualified lawyer and an accountant. He is not working in either profession at present. His place of work was handed up to me during the course of these proceedings. His present occupation is unknown. JA is joined as an intervener, but she has chosen not to file any affirmations or to appear in court. She is said to work in marketing. J, P and JA are all unmarried. P and JA live in two of the disputed properties. P is said to be engaged. 14.Lawyers for the wife helpfully prepared a very detailed chronology of the marriage running to some 18 pages in length. From this it is clear that throughout the marriage the parties invested in real estate, with properties frequently being bought and sold. 15.Mr. Pilbrow S.C for the wife summarizes the wife’s position in his opening as follows:
16.The husband, for his part, maintains that the buying and selling of real estate was a family interest and to a large extent that this was funded by his parent’s estate, his gratuity and other earnings and from the business itself. The husband states that from time to time, properties were held by different family members for a variety of different reasons. 17.Immediately after the parties’ marriage and for the next 14 years, they lived at the Broadcast Drive property with the husband’s mother. It seems that the wife was bitterly unhappy during this period. The fact that the wife had a poor relationship with her mother in law, has been repeatedly referred to during these proceedings. It appears to have been a bone of contention throughout the marriage. The husband alleges that the wife did not treat his mother well. 18.Another source of family discord was the husband’s alleged affair with a domestic helper in or about 1990. The husband denies this, notwithstanding the production of a letter apparently written by the domestic helper to the husband in very affectionate terms. The wife has on occasion referred to the husband raping the domestic helper. In any event it seems to have been accepted within the family that the husband had an affair. 19.In March 1997 the husband retired. He appears to have lived separately from the wife on and off and he eventually formed a relationship with a Ms ST. He says he first met her in 2001. In April 2002 he opened a joint account with Ms ST. They purchased a property together in July 2002. In September 2002, the day following the mid autumn festival he left the matrimonial home for good. Shortly thereafter he began cohabiting with Ms ST in China. Both Ms ST and the husband deny having a sexual relationship. 20.On the 17 December 2002 the husband issued divorce proceedings in California. On the 3 January 2003 these were served on the wife. Four days later on the 7 January 2003 the husband sent an e-mail to his US attorney asking him to “shelf off the case for the time being”. 21.It is the wife’s case that shortly after being served with the US divorce proceedings J spoke with the husband and that the husband told J that he would return to her if a) properties held in her sole name were transferred to the children and if b) she renovated the Broadcast Drive property. This she says was reiterated further in February 2003 when a meeting took place between the husband and J in California. 22.Beginning in March 2003 properties were assigned from the wife to the children. P as the solicitor in the family confirmed during his cross-examination that he was responsible for the conveyancing transactions. The 2C property and 13D property were transferred from the wife to P and J six days apart on the 12 and 18 March 2003 respectively. Three months later they were again transferred from the names of J and P to APL. Those transactions were only two days apart, taking place on the 18 and 16 June respectively. The Po Ming property was transferred from the wife to PY on the 5 April 2003. It was not transferred on. The San Francisco property was transferred to the four children on the 22 April 2003 and then onto J in his sole name sometime later on the 23 February 2005. Jaffe Road was transferred from the wife to JA, J and P on the 15 October 2003. The wife’s ¼ share in the Hankow Centre property was transferred to JA in November. In less than 9 months the wife had divested herself of all her real assets. The husband maintains that these properties are family assets. 23.On the 28 April 2003 a default judgment entered against the wife in the United States was set aside. 24.On the 16 October 2003 the wife issued divorce proceedings in Hong Kong. On the 22 October 2003, prior to serving the petition on the husband, she issued an ex parte injunction against the husband restraining him from disposing of assets. She accuses him in that application of disposing of assets, of not supporting her or the children financially and of being less than frank in his disclosure. This is denied by the husband. In January 2004 the US Proceedings were withdrawn. 25.On the 6 November 2003 the husband applied to discharge the injunction. He was only successful in part. Since then numerous orders have been granted, by consent, allowing the husband to draw on funds for his own needs and those of the family as a whole. He is allowed to draw HK$10,000 per month to cover his own expenses. In addition he has drawn other sums to pay inter alia for tax and legal costs. Funds were also used to cover auto pay expenses for the family. 26.The husband presently lives on the Mainland. The wife maintains that she splits her time between the Broadcast Drive property, the 2C property, which is allegedly where JA lives and the 13D property, which is allegedly where P lives. It is unclear how the wife is maintained, save that the children cover some of her expenses, including payment of the maid’s salary. The open proposals 27.Each party put forward open proposals for settlement shortly before the commencement of the trial. These are as follows: The wife’s open proposals 28.(1) Petitioner’s application for ancillary relief
29.In his closing Mr Pilbrow added that the wife has borrowed HK$1,430,000 from friends, relatives and the children and that this will need to be repaid. The Legal Aid department also have a lien over anything that the wife may recover to the tune of HK$553,496 and c HK$76,433 is due and owing to the husband. On the basis of these debts and the fact that on the wife’s case the husband has other cash assets, the wife seeks an additional lump sum payment of HK$500,000. 30.In addition the wife seeks 50% of the value of the Widow and Orphans Pension. 31.In so far as the net proceeds of sale of the 1/4 share of the Hankow Centre property is concerned, it is the wife’s case that these funds belong to JA. The husband’s open proposals 32.The husband’s solicitors put their client’s proposal thus:
Potential conflict of interest 33.At the end of the second day of the trial I became concerned about what appeared to me at the time to be a potential conflict of interest between the wife and the interveners which were supporting her i.e. PY, JA, J and P, together with APL. I raised the issue again at the beginning of the third day of the trial, immediately prior to J giving evidence by video link from Boston. This was heard in the Technology Court. It seemed to me that on the face of it the interests of the wife and those of the interveners may not be one and the same and that the issue needed to be resolved before J began giving his evidence. 34.The interveners were separately represented until December 2007 whereupon they all filed Notice of Acting in Person. On the 13 June 2008, the wife’s solicitors TY Lam & Co came on record for them also. 35.I stood the matter down for a while in order to give everyone time to consider the difficulty and the possible implications. Subsequently PY confirmed on behalf of herself, JA and P that the interveners would represent themselves. Likewise J did the same by video link from Boston. The trial proceeded on that basis. PY appeared in court on behalf of the interveners from the 27 October – 7 November, whereupon she returned to the States. She has not appeared in court since. P was present on the 6 and 7 November 2008 and on the 19 March 2009. Discussion 36.I must now turn to consider the issues, the law and the parties evidence as set out in their affirmations and as given orally by them during the hearing. I have also considered the evidence of J, PY and P and Ms ST. For the avoidance of doubt, in so far as the matters set out in this judgment differ from the evidence of the husband or wife, or of one of the interveners, that is because I have preferred the evidence of one or other of the party’s or it is because I do not find the evidence given credible, or because I consider that the documents produced confirmed my findings of fact. Setting aside dispositions The law - generally 37.Both parties have issued applications pursuant to s.17 Matrimonial Proceedings and Property Ordinance, Cap 192. This section states as follows:
38.Therefore, if I am satisfied that either side has made a disposition with the intention of defeating the other side’s claim for ancillary relief, then I may set that disposition aside. I accept that I need to look at the actual intention of the disponor at the time that the dispositions were made. I also accept that it must be clear that there was an intention to defeat the other side’s claim for ancillary relief, although it may not be the only or even the dominant intention of the disponor. In the words of Ms Irving:
39.In so far as the appropriate standard of proof to be applied, I agree that I need to be “satisfied”. In other words I must have made up my mind that, the party in question transferred property or money to a third party with the intent of defeating the other’s claim or potential claim for ancillary relief. Again in the words of Ms Irving,
And in the words of Rayden,
40.I agree that in considering the intention of the parties it is necessary to look at each disponor’s conduct. In other words can each side’s intention to defeat the other’s claim, be gleaned from their conduct at the time in question? Consequently I accept that the circumstances surrounding the making of the dispositions are highly relevant. 41.Both sides have referred me to the rebuttable presumption found in s 17(3) Matrimonial Proceedings and Property Ordinance, Cap 192. In other words if the disposition was made less than three years before the s.17 application was made, then there is a presumption that it was done with the intention of defeating the other’s claim for ancillary relief. In the words of Ms Irving:
Is it possible for the court to set aside the transfer of the 2C property, the 13D property, and the San Francisco property? The law 42.When addressing the court orally during his opening, Mr. Pilbrow said
He reiterated this in his closing as follows:
43.In support of this proposition he refers to two cases namely McGladdery v McGladdery [1999] 2 FLR 1102 and HKCB Finance Ltd v Yuen Yu Wan Sandy and Wong Chiu Mui CACV 355/2005. I was also referred to the case of Ansari v Ansari [2008] EWCA Civ 1456, which is a new Court of Appeal decision out of England. Although this is concerned with a slightly different point, it nevertheless reconfirms the basic proposition that a disposition must be by a party to the ancillary relief proceedings. 44.When I put this to Ms Irving in the last hearing she conceded that this was probably right. Consequently I intend to proceed on the basis that the husband’s application to set aside the dispositions referred to in paragraphs 1, 2 and 4 of his Notice of Application cannot as a matter of law succeed because in each case the properties have been transferred on by the disponee. 45.I will consider below how else these properties might be regarded. Should the husband’s application dated the 2 November 2006, to set aside other dispositions made by the wife to the children succeed? 46.The other relevant properties are the Po Ming property held in the name of PY, the Jaffe Road property held in the name of JA, J and P and what was originally a 1/ 4 share in the Hankow Centre property held in the name of JA. The Hankow Centre property has been sold during the course of the proceedings and the 1/4 share in the sum of HK1.625 million has been paid into court. PY, J and P all received HK$1.625 million each. J said in evidence that he used his share to purchase a property for himself in Hong Kong. P said that he deposited the sum into his bank account and that part of the sum was used to pay the legal costs associated with the interveners proceedings. PY said she used her share to redeem a mortgage in the sum of HK$800,000 taken out against the Lucky House property (a property held in her sole name). She confirmed that she had given the HK$800,000 to the wife. To that end it is worth pointing out that in the consent order of the 15 May 2007 that the following undertaking was given by the interveners:
47.I agree with Ms Irving that PY’s actions were in contravention of the spirit of this undertaking. The wife’s case 48.The wife’s case is two fold. In the first instance she says that she transferred the properties, here the Po Ming property and the Jaffe Road property, not in order to defeat the husband’s claim, but because this was the husband’s pre-condition to a reconciliation with her. It is her case that J, after speaking to the husband, told her that the husband would be prepared to drop the US proceedings and to reconcile with her if
49.Secondly she argues that in any event these properties belonged not to her but to J and therefore that the husband can have no claim against them. The transfer of properties 50.When looking at the s.17 application I intend initially to confine myself to the first line of argument as this goes to the wife’s actual intention at the time that the dispositions were made. Mr Pilbrow argues that the wife had no intent, subjective or otherwise, to defeat the husband’s claim. It is accepted that the burden is on the husband to show that the wife transferred these properties with an intention to defeat his claim. The wife puts her case on the basis that it was clear that she wanted to reconcile with the husband and that the transfers of properties were entirely consistent with this objective. Did the husband agree to the transfer of the properties? 51.The wife argues that it is clear that her version of events is correct, because the husband did not oppose the transfer of the properties at the time. There is a reason for this says the wife, namely that she was complying with his request. 52.In support of this the wife points to the fact that the husband agreed to “shelf” the US proceedings only shortly after having issued them. 53.On the 28 November 2003 the husband wrote to the four children by e-mail as follows:
54.There does not seem to have been a reply. Was this a tacit acknowledgment of the transfers by the husband? Or was this a sarcastic comment made by an aggrieved parent? I tend towards the latter interpretation. 55.In a subsequent e-mail to J dated the 12 December 2003 the husband states:
56.Again the suggestion by the wife is that this demonstrates an acknowledgment by the husband that he agreed to the transfers. 57.In an undated letter apparently to the wife, he also said as follows:
58.The wife has also produced a copy of the husband’s original will dated the 15 November 1999, in which the husband leaves his estate in equal shares to JA, PY, J and P. This says the wife was the husband’s real intention. He had always meant to leave the assets to the children. He objected to the fact that all of the family assets were held in the name of the wife; he wanted to recover some control of the family fortune and therefore insisted that this happen as a precondition to reconciliation. 59.During cross-examination the husband admitted that there had been some negotiations between the parties after he had issued the US divorce proceedings. But he insists that he never told J that he would return to the wife if she transferred the properties to the children and renovated the Broadcast Drive property. He said, and I believe him that it was never his intention to reconcile with the wife. 60.Reference is made to possible reconciliation in letters from the wife’s US lawyers. This was not acknowledged in the responses from the husband’s lawyers. I fully accept that the husband never intended to return to the wife. But did he wish the properties to be transferred to the children in any event? If not why didn’t he take action to rectify the situation sooner? 61.The husband said that he didn’t do anything about the transfer of properties because he didn’t believe that there was anything that he could do. This did not mean that he consented to the transfers, or that the wife’s story is to be preferred. I accept that on the balance of probabilities that this is more likely than not to be correct and that the husband only decided to take action after, in his words, J and P became “traitors”. 62.Later he said that he wanted to choose for himself how the properties should be distributed. 63.I agree that there is also some difficulty with the husband’s position, especially given the fact that he did not issue proceedings to set aside until 2006. 64.Ms Irving assists by pointing to the inconsistencies in the stories of the wife and the interveners:
65.I agree. 66.During oral closings Ms Irving said that it was
67.I accept that this is a possibility. I found both J’s and P’s evidence completely lacking in substance or credibility. 68.I have also noted the following:
69.It may be that J and perhaps P decided to take action to ensure that they retained the family assets and that those assets remained under their control. However it seems to me more likely that it was the wife who remained in the driving seat and that it was J and P and to a lesser extent PY who did her bidding as and when required. 70.In the witness box the wife came across as a very difficult and domineering woman. Her evidence seemed rehearsed. She was extremely repetitive. Her credibility was completely undermined when it became clear that a letter that she had produced as evidence in support of her version of events was shown to have been doctored. The letter was altered from an 18 page to a 4-page document. The wife’s numerous explanations belied belief – e.g. that she took out the unimportant detail, that this was necessary so that her lawyer would understand it, that the husband had recreated the duplicate letter, that it was of no import etc. What the wife did was to recreate evidence so that it supported her case. Her actions were dishonest and must be condemned. It resulted in more days being spent in trial than would have otherwise have been necessary. Past history 71.When considering the s 17 application I am also conscious of the history of this case. It seems that the wife was always concerned to have control of the family assets and to a certain extent the husband allowed this to happen. For example the San Francisco property was transferred into her own name because it was thought at the time that the husband was likely die before her and therefore it was more expedient for the property to be held solely in her name. The husband accepted this during cross-examination. 72.When the wife discovered the husband’s so called affair with the domestic helper her reaction was to ensure that the family funds were removed further from his control. PY, for example says that it was agreed that the children and the wife would manage the majority of the US funds. The fact that the family assets were controlled by the wife seemed to be a constant source of friction between herself and the husband. 73.Given the history here it seems to me inconceivable that the wife would then transfer the properties to the children because and only because she wanted the husband to return to her. It seems to me extremely unlikely that the wife would ever have considered putting herself in such a vulnerable position. 74.I have also taken on board the fact that at no point did any of the children offer to transfer any of the properties back to the husband. PY said that she didn’t want any of the properties, that she had never wanted any of them. But even she had not seemingly had the courage to transfer properties allegedly owned by her back to the husband. PY has nothing to do with the properties held in her name. They are managed by the other siblings. 75.I am also conscious of the fact that even when the wife applied ex parte to injunct the husband’s remaining assets that nevertheless she ensured that prior to that application that funds were transferred to her from the pool of family assets. This was not disclosed in her affirmation in support of the injunction. In January 2003 US$47,797 (c. HK$372,816) was taken from the joint account with PY. A further US$58,120 (HK$453,336) was taken from the Schwab account in the United States and in August 2003 HK$540,000 was taken out of the Fubon account - in cash. The whereabouts of this sum, which totals c HK$1,365,000 has not been adequately accounted for. The wife said at one point that she had spent a considerable sum of money on a private investigator. She was unable to produce any evidence in support of this assertion. J said that he could not remember assisting the wife in taking out the cash. PY, who was in the States at the time, said that she believed that the US$47,000 odd had been transferred to maintain the San Francisco property. Why this was thought necessary was not fully explained. In addition the wife had the benefit of the HK$800,000 given to her by PY from the remortgage of the Lucky House property. 76.Mr Pilbrow argues that
77.Having reviewed all of the evidence I am not convinced that the wife made the transfers with a view to reconciling with the husband. I am satisfied that she did so, at least in part, in order to ensure that the assets remained as far as possible beyond the husband’s reach. I accept that she wished to retain control of the family assets. I also accept that she was helped in this by both J and P and to a lesser extent and perhaps more unwittingly by PY. In the circumstances it seems to me entirely appropriate to set aside the wife’s transfers of the Po Ming and Jaffe Road property. I am satisfied that a different financial award will be made in the event that this is done. Likewise it seems to me entirely appropriate that the court should include the HK$1.625 from the proceeds of sale of the Hankow Centre property in the schedule of matrimonial assets. The renovation of the Broadcast Drive property 78.The wife also said that the husband wished her to renovate the Broadcast Drive property. She claims that she did so and has produced photographs of the so-called renovation in support of her claim. 79.The difficulty with the wife’s case on this is that it really doesn’t stand up to detailed scrutiny. It is clear from the photographs that there has only been a very peripheral attempt to tidy up the place and to make it look clean and tidy. Certainly there has not been a significant renovation of the property. Any redecoration has been minimal. Are these properties matrimonial assets in any event? The beneficial ownership of the family properties The Ritz property 80.As I have stated above, initially the wife claimed that a property known as the Ritz property was transferred to J “as a gift in anticipation for celebrating his successful graduation from university the following year i.e. 1993”. In her last affirmation she changed this version of events and said that the property was given to J as a reward, as his academic performance had been poor historically and going to university had proved to be a major milestone. (see para 7.1 – 12th affirmation dated the 30 September 2008). Thus on the wife’s case J was the legal and beneficial owner of the Ritz property. She said that J then appointed her as his power of attorney and that she then successfully sold the property for HK$9 million and thus he was also the legal and beneficial owner of the proceeds of sale. The wife then purchased three properties, she says out of the sale proceeds – namely the Jaffe Road property, the 2C property and Po Ming Building. Consequently says the wife, J legally and beneficially owned these three other properties. She does not accept that the Ritz property and those that followed were family assets, 81.The husband, for his part said that the Ritz Property originally formed part of the estate of his mother and that it was assigned to J on trust for the parties. He said more specifically that it was transferred to J in order to evict an existing tenant on the basis of self-use. He said that it was never the intention that J should be the sole legal and beneficial owner of that property – or those that were purchased from the proceeds of sale thereafter. In support of his case the husband refers to family history and to the fact that different members of the family held property at various times and for a variety of different reasons. It is the husband’s case that these were all family properties, arising out of what might loosely be described as a family business, or interest in real estate. 82.Husband says that the only reason that the property was transferred to J was because there was a tenant in the property at the time and it was convenient to put it into J’s name
83.I accept what the husband has said in this respect. It makes logical sense. I have also taken due note of the fact that the wife accepts the fact that the property was repossessed
84.I also accept the husband’s argument that this was a practice undertaken by the family in the past. For example in February 1990 the Hankow property had been transferred to JA for the same purpose. This did not mean that JA beneficially owned the property. Indeed in December 1993, it was transferred from JA’s name into the names of the wife, PY, P and J. (Incidentally the wife says that it was always the intention to transfer the property to the four children, but that because JA was out of Hong Kong at the time, her 1/ 4 share was transferred to her.) 85.But, it is also clear that on occasions properties were either gifted to or sold to the children. Did the children then own those properties beneficially – or where they simply holding them for and on behalf of the family as a whole? This is less easy to determine. For example in January 1999 PY was given Flat XX, X/F Lucky House, No 149 Wanchai Road, Hong Kong (Lucky House), when the wife transferred the property to her. The reason for this transfer is unclear. One explanation is that PY was considering returning to Hong Kong to practice. Another suggestion was that it was a gift – rather like the Ritz property was supposed to be a gift for J. This property was then re-given to her on her wedding day. PY said in her evidence that she did not want this property and that she had never wanted any of them – that she did not need a property in which to live and if necessary she could buy her own. This property is presently vacant. It is not subject to any of the applications presently before the court. 86.In addition to having some dealings with the Hankow property, JA is also said to have purchased another property from the wife i.e. Luen Street in 1999 for HK$700,000. It is unclear if this was a transaction at arms length or whether or not JA purchased this property with the aid of a mortgage – or if in fact other family monies were provided to her for that purpose. The rental from that property was originally paid to the husband. JA stopped making this monthly contribution of HK$5,200 per month in June 2003. Thus although the property was legally owned by JA, the husband had originally received the benefit of it by way of the rental. Again this property is not subject to any application before the court. 87.Consequently I accept as a general proposition, in the words of Ms Irving that
Other evidence 88.J said in answer to a question concerning whether the husband ever complained about accounts being held in the name of he and the wife:
89.This reference also supports the husband’s case that the properties were regarded as family assets. 90.Generally speaking I do not accept the wife’s version of events. The Jaffe Road and Po Ming Building property will be transferred back to the wife. Although the 2C property has been transferred to APL, I am nevertheless of the view that this can loosely be described as a financial resource that the wife may have some access to. I accept that she lives there in part. The 13D property 91.In addition the wife said that she bought the 13D property from the proceeds of sale of a further property – namely Block X, X/F, XXX – XXX Gloucester Road, Causeway Bay, Hong Kong. (The 7C Property). She maintained that although the property was held in her name that it was infact beneficially owned by her mother (the maternal Grandmother). She said that the maternal Grandmother had wanted to leave the 7C Property to J. Thus says the wife, the 13D property was also J’s property. Ms Irving points out:
92.I tend to agree. 93.Consequently it seems to me that the 13D property is also a financial resource that is available to the wife. I do not accept that this property is, or ever was beneficially owned by J. The San Francisco Property 94.This property was initially transferred to the four children in April 2003 and then on again to J in his sole name in February 2005. Mr. Pilbrow says that the reason for this is simple. J was living and working in the United States and therefore it made logical sense for the San Francisco property to be transferred to him so that he was able to manage it more effectively. The difficulty with this argument is that in fact J is presently residing and studying in Boston. He is in no better position to currently manage this property than any of the other siblings. In the circumstances it seems to me entirely probable that this property is also a financial resource that is available to the wife. I have also noted the inconsistencies between the interveners evidence, namely that PY says she does not have a beneficial interest in the property and seems to have no problem gifting J a significant asset and P who said that he retained a beneficial interest. It seems to me that a more logical explanation would be that this property, like the others, continues to be viewed as a family asset. It is presently vacant. Should the wife’s application dated the 17 September 2007 to set aside certain dispositions made by the husband to his partner succeed? 95.The wife seeks to set aside dispositions made by the husband to Ms ST. She points in particular to cash transfers and also to the property purchased in their joint names. The husband maintains that Ms ST has not made anything but a very limited contribution to the funds held in the accounts or to the purchase of the property in China. It is his case that these transfers were made not with the intention of defeating the wife’s claim, but in order to maintain both himself and Ms ST. The law 96.The law remains as set out above. The purchase of the property in China took place in July 2002. The alleged transfer of funds seems to have taken place from in or around that time. The wife’s application to set aside the dispositions is dated the 17 September 2007, i.e. over three years from the date of the alleged dispositions. Therefore the burden rests with her. She has to show that the husband made these dispositions with the intention of defeating her claim for ancillary relief. Discussion The property 97.The wife’s case that the husband purchased the property in China to defeat her claim lacks substance. In July 2002 the wife had control of all of the family assets, save for the Broadcast Drive property and the husband’s pension. Divorce proceedings had not been issued, either in the US or in Hong Kong. 98.Ms ST confirmed under cross-examination that the property was held jointly so that the husband could obtain a mortgage on it. I accept that the husband may have found it difficult to obtain a mortgage given his age and lack of earning capacity. Ms ST’s financial contribution was limited to redecoration and the purchase of furniture. She said that she held the property jointly with the husband and that it was “our” property. 99.I accept that the husband’s intention at the time was not to defeat the wife’s claim, but simply to ensure that he had somewhere modest to live with Ms ST. I also accept that given his age he thought it prudent to put the property in the joint names of himself and Ms ST. Further that this ensured that he was able to obtain a mortgage on the property. But I also accept that to all intents and purposes the husband beneficially owns the property. Therefore I will in any event include 100% of its net value in the schedule of family assets. The cash transfers 100.The wife’s case is that between April 2002 – October 2003 c HK$460,000 was transferred by the husband into an HSBC consolidated account held by the husband and Ms ST. 101.Reference is also made to two sums of money in particular – HK$100,000 transferred to Ms ST allegedly as a gift on the 9 April 2003 and a further sum of US$25,000 which the husband said was from PY. Originally he had intended to keep that money for her. Ms ST confirmed that both sums had been used to pay legal fees. I accept that. 102.Latterly the wife alleged that over HK$2 million had been transferred out of accounts held in either the husband’s sole name or in the joint names of both she and the husband to accounts held either by Ms ST or into joint accounts held by the husband and Ms ST. Thus she says this amount should be set aside as it was secreted out of accounts with a view to defeating her claim. 103.I do not accept this. Some of the transfers referred to in the schedule go back to February 2002. This is well before the husband left the matrimonial home in the October. The husband says that there has been some double accounting and that he never took anything like the amount of money alleged. He also maintains that up until the time of the injunction and indeed up until December 2003 he was continuing to meet family expenses for the properties and otherwise by auto pay. After that those expenses were met at least in part from the injuncted pension. 104.Mr Pilbrow for the wife asserts that I should approach the issue of these funds in the same way as Thorpe LJ in the case of Purba v Purba [2000] 1 FLR 444. In that case the Court of appeal found that money transferred by a husband to his relatives should still be taken into account by the court when considering the issue of ancillary relief:
105.I concur. In this case Ms ST confirmed that the money in the accounts belonged to the husband. She did not make any claim to it. She is presently working. Therefore it seems to me that any monies in these accounts can quite properly be included in the schedule of matrimonial assets, as the husband clearly beneficially owns them in any event. The more difficult question is how much money is there, given that no up to date accounts have been produced. The wife’s lawyers produced a table showing the balance in the husband’s accounts or those held jointly with Ms ST or the children, as totalling HK$1,010,012.45 as at the spring of 2008 (statement dates – January – April 2008). I accept those figures. Pension monies 106.In addition Mr. Pilbrow originally argued that as the husband has only been withdrawing HK$10,000 per month from the pension for his daily living expenses the balance should also be available for distribution. 107.Infact Ms Irving was able to show that almost the total amount had been withdrawn by consent for inter alia salaries tax, stamp duty, legal costs and to cover the auto pay arrangement for the family. On the basis that he received the sum of c. HK$33,000 per month and the money has been injuncted for 5½ years that would mean that approximately HK$2,178,000 had been received. According to the schedule of that HK$2,050,976 had been spent. There is therefore very little, if anything left to be included in the schedule of matrimonial assets. What are the matrimonial assets and other financial resources owned legally and/or beneficially by the parties? The law Ancillary relief 108.It is generally accepted that prior to determining the issue of ancillary relief, the court is charged with establishing what the matrimonial assets are and the value of those assets. This is clearly set out in DD v DKW (CACV no 91 of 2007). There the Hon Mr. Justice Cheung JA said at para 69 (3) as follows:
109.As referred to above, the Hon Mr Justice Cheung JA identifies the relevant section 7 factors under the headings of need, compensation and sharing. The court shall take into account the s.7 factors when determining an application for ancillary relief. For ease of reference I have set them out again here.
110.DD v DKW (CACV no 91 of 2007) affirmed the basic principle developed in England that any division of assets should be reviewed against the “yardstick of equality”. In the words of Lord Nicholls of Birkenhead in the landmark House of Lords decision White v White [2000] UKHL 54.
And later
111.The statute in England and Wales has not changed. The factors that the court has to take into account can be found at s. 25 of the Matrimonial Causes Act 1973. They are largely the same as our own s.7 factors, as set out above. The difference is in the judicial interpretation of that statute, which can be summarized as a move away from the reasonable needs approach, to one of equality. It is fair to say however that there remain a large number of variables and that when considering the yardstick of equality the court has on occasion reverted to a more needs based approach to assist them in their deliberations. (See for example McCartney v Mills [2008] EWHC 401 (Fam)). 112.The correct approach to be taken in Hong Kong has again been considered in a decision handed down by our own Court of Appeal on the 12 May 2009 i.e. W and H, Z CACV 127/2008 (unreported). The Hon Rogers VP said at paragraph 48
At paragraph 80 the Hon Stone J added
113.It is fair to say that neither party argued the relative merits of the appropriate approach to be taken in this case save that the wife has argued her case on a the basis of a 50:50 division of the parties assets. The question has then been - what is to be regarded as a matrimonial asset and what can and should be divided? It should also be noted that this judgment was handed down after the close of this case and therefore to an extent it is perhaps a little unfair to refer to it. But it does again raise the issue of fairness and how to achieve such an elusive goal. In this case I have found the needs based approach helpful when considering how to divide the parties assets. The yardstick of equality has been considered in that context. Matrimonial assets 114.The parties have the following assets. Given that there has been no agreement with respect to valuations I intend to take a mean value wherever appropriate:
115.Therefore there is just over HK$32 million in the matrimonial pot. Those properties marked with an * are not capable of being redistributed. I have loosely described them as a financial resource of the wife. It seems to me that she may be able to live in any one of these three properties. I accept that she currently splits her time between the 13D and 2C property. In addition there is the husband’s pension, which produces an income of c. HK$33,000 per month. Each party’s cash assets 116.I have not subscribed a value to each party’s cash position, as it seems to me that it is impossible to accurately predict what that may or may not be. I accept that the wife has had the benefit of c HK$1,365,000 from the matrimonial pot and an additional HK$800,000 from PY. I also accept that the husband has had the benefit of other funds, some of which have been held in the name of Ms ST. As at the spring of 2008 the husband appeared to be holding something in the region of HK$1 million. To some extent these sums appear to cancel each other. I do not intend to include either in the schedule of matrimonial assets for distribution. How then should those assets be divided, bearing in mind the principles of need, compensation and sharing and the s.7 factors? a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future; 117.It is fair to say that neither party has an earning capacity. The income available to each is from the husband’s pension and from property rentals. In addition it seems that the children partially support the mother. Mdm ST is also presently working. In terms of financial resources, the wife has the 13D property, the 2C property and the San Francisco property at her disposal. I accept that both 13D and 2C are occupied by JA and P respectively and that the wife lives in both properties from time to time. Likewise I accept that she may be able to live in the San Francisco property going forward. It is empty at present. It is unclear what rental value this property may have. Both parties may also have some cash assets at their disposal, the precise amount of which it is impossible to accurately determine. 118.From PY’s evidence it appears that the Po Ming property is presently let. Need (b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; 119.In broad terms both parties need somewhere to live and sufficient money to live on. As I have indicated I accept that the wife splits her time mainly between the 2C and 13D property. I do not accept that she spends any significant time in the Broadcast Drive property. I accept that she could live at either of these properties, or indeed the San Francisco property. The husband for his part lives in a property in China. He wishes to return to the Broadcast Drive property in which to live. He says that he has maintained himself from an allowance of HK$10,000 per month that he has been permitted to draw from his pension. As I have indicated above, both parties appear to have had access to other cash assets in the past. (c) the standard of living enjoyed by the family before the breakdown of the marriage; 120.The parties enjoyed a good standard of living during the marriage. The husband was senior civil servant earning in the region of HK$100,000 per month. They had a number of property investments which were income producing. They could be described as comfortably off. (d) the age of each party to the marriage; 121.Both parties are now elderly. The wife is 69 and the husband 72 years old. (e) any physical or mental disability of either of the parties to the marriage; 122.This was not argued during the course of the trial. Compensation 123.This was not argued. Sharing (f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family; 124.I accept that both parties made a significant contribution to the marriage and that in a sense neither contribution could be said to be more significant than the other. 125.The wife said that she contributed financially by astute negotiations with developers, and from the estate of the Grandmother and her brother. Although I do not accept a lot of what the wife has said in relation to the 13D property, nevertheless I accept that she contributed fully in her role as wife and mother. While the husband disputes this, I do not think that there can be any doubt that both contributed to the upbringing of their children – all of whom have done well. The husband as the breadwinner clearly made a significant financial contribution. He also brought his gratuity and inheritance to the table. (e) the duration of the marriage; 126.By any one’s calculation this is a very long marriage. Division of Assets 127.In order to satisfy each party’s reasonable needs and to achieve a fair and just resolution of this matter, I will to make an order as follows:
128.There can be no change in ownership of the 13D property, the 2C property, and the San Francisco property. I accept that in part these continue to be family assets and can loosely be described as a financial resource of the wife. However although it seems to me that the wife can live in these properties, I also accept that that, with the exception of the San Francisco property, they are presently occupied. They are not income producing. It is unlikely that they can be sold. Consequently I shall further order that
129.Thus the husband will be able to reside in either Broadcast Drive property or in the property in China. The Po Ming property is income producing. 130.The wife for her part may continue to live in either the 2C or 13D property, or alternatively in the San Francisco property. In the alternative she may choose to live on her own in the Jaffe Road property. 131.If one includes all of the properties in the calculation, this division gives the wife HK$21,650,000 in terms of the value of the real property. The husband retains HK$8,805,000. If one takes out of the equation the 13D property, the 2C property and the San Francisco property, this gives the wife HK$3,900,000. Neither calculation achieves fairness by producing a 50:50 split of the asset base. I am however satisfied that as far as possible both sides housing needs will be met by this order. I am also cognizant of the fact that there are other assets held in the names of the children, which remain untouched. It would also be possible it seems to me for the wife to live in one of these other properties. Given the above to what extent can and should the court depart from the yardstick of equality bearing in mind all of the factors set out above and the overriding concept of fairness? 132.As I have said I do not accept that his is a suitable case for an equal division of assets. The factual matrix is such that an equal division is virtually impossible in any event. Given the peculiar circumstances of this case it seems to me that it is more appropriate to look to the parties’ reasonable needs and the ability of the family asset base to provide for those needs. The division of assets ordered will ensure that both parties housing needs are met. 133.In so far as the proceeds of sale of the Hankow Centre property are concerned I intend to divide those proceeds on a 50:50 basis. Each side will receive HK$812,500. I appreciate that the Legal aid statutory charge will bite on the wife’s share. These funds will go someway towards satisfying each side’s bill for costs. Should the husband pay the wife any maintenance? If so, how much? 134.The husband has argued that the wife should retain the benefit of the properties held either by her or the children. Thus she would have somewhere to live and an ongoing income from the rentals received. For his part he wishes to retain his pension. 135.The difficulty with the husband’s position, is that none of the properties originally retained by the wife, with the possible exception of the San Francisco property are, or can become, income producing. I have ordered that the Po Ming property be transferred to him. This is or can become income producing. Likewise Jaffe Road can also become income producing, if that is not the case already. 136.Both parties state in their Form E’s that they will need approximately HK$28,000 per month on which to live. (The husband says that he needs c. HK$23,000 per month and that this will increase by HK$5,000 per month, if he takes up residence in Hong Kong). 137.In these circumstances I accept that in the interests of fairness, and notwithstanding the way in which these proceedings have been conducted, that the wife should receive a share of the husband’s income. The wife seeks HK$15,000 per month. I will make an order to that effect such payments to commence on the 1 July 2009 and to continue thereafter on the 1st day of each succeeding month during the joint lives of the parties or until the wife’s remarriage whichever is the earlier. This will leave the husband with HK$18,000 per month plus a rental income from the Po Ming property. I have also noted that the wife is partially maintained by the children. She may also receive a rental income from the Jaffe Road property in the event that she continues to live with the children. Consequently I am satisfied that both parties should have sufficient money to live on going forward. This seems to me to be a fair and sensible solution in all the circumstances of this case. Costs 138.I am of the view that a costs order should be made that accurately reflects my concerns about the wife’s litigation conduct and the fact that at the end of the day I have not come down wholly in favour of one side or the other. Therefore I will make an order nisi to be made absolute in 14 days time that the wife do pay a 50% contribution towards the husband’s party and party costs, to be taxed if not agreed. There shall be certificate for all counsel involved in the trial.
Mr. David Pilbrow and Mr Enzo Chow instructed by Messrs TY Lam & Co. for the Petitioner Ms. Frances Irving instructed by Messrs Fairbairn Catley Low & Kong for the Respondent and the Intervener STYY Interveners : TKLP – acting in person
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