Plto v. Klk and Another

CACV 48/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 48 OF 2012

(On Appeal from HCMC No. 2 of 2010)

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BETWEEN

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J U D G M E N T

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Hon Cheung JA :

Background

1.The petitioner husband (‘husband’) married the respondent wife (‘wife’) on 6 January 1968.  On the husband’s petition based on two year separation, a divorce decree nisi was pronounced on 26 May 2009. The decree absolute was made on 1 September 2010.  The wife applied for ancillary relief before Deputy High Court Judge Carlson.  This is an appeal by her from the judgment of the Judge.

2.The husband who is now 72 and the wife who is now 73 have a grown up daughter K.  Two other children, namely, another daughter and a son died in 1995 and 2000 in tragic circumstances.

3.Although the parties were married for 41 years, the husband claimed that they had in fact been separated since 2001 after the death of their son.  His petition stated that the parties had separated since February 2001.  Although this was disputed by the wife in the ancillary relief application, who claimed that the separation only began in July 2008, the Judge found that the parties had separated in February 2001. The relevance of this finding is related to the great wealth generated by the husband’s construction business Analogue Holdings Limited (‘Analogue’) after the parties’ separation in 2001.  84.63% of the shares of Analogue were settled by the husband on a Jersey Island trust (‘the Family Trust’).  The husband, the wife and K are, for all intents and purposes, the three beneficiaries of the Family Trust.  The two deceased children were former beneficiaries.  The husband regarded himself, the wife and K as each having an equal one-third interest in the Family Trust.

4.The Judge, based on expert evidence, valued 84.63% of Analogue at HK$1,560,686,000.  The Judge regarded that each of the three beneficiaries notionally has a one-third interest in the trust.  Hence the husband and wife’s interest in the Family Trust is $1,040,457,300.

5.Outside of the Family Trust, the husband has assets of HK$46,052,707 and the wife $58,259,660. 

6.The total value of the matrimonial assets as found by the Judge is as follows :

1) The husband and the wife’s interest under the Family Trust	HK$1,040,457,300
2) The husband’s assets	46,052,707
3) The wife’s assets	58,259,660
	HK$1,144,769,667
	(round up to $1,144.8 million)

7.If equal distribution was to be effected on $1,144.8 million, the wife should get $572,384,833.50 (or rounded up to $572.4 million). The Judge recognised that with the long marriage (even excluding the period of separation) the wife should be entitled to equal distribution of the matrimonial assets.  However, at the end, the award to the wife was $432 million (round figure).  This represents 37.74% of the joint assets of $1,144.8 million.  The $432 million is made up as follows :

HK$370,000,000	(lump sum payment to be made by the husband)
58,259,660	(the wife’s own assets)
3,750,000	(transfer of the husband’s half share in a property)
HK$432,009,660 (rounded down to $432 million)

8.Out of the $432 million, the husband was ordered to pay a lump sum of $370 million to the wife.  The wife would keep her own assets (similarly the husband would keep his own assets).  The husband has agreed to transfer his half share of a property (1402 Westland Gardens) which is registered in the joint names of the husband and wife to the wife.  The property is valued at $7,500,000.  As a result of the transfer, the wife will get an additional $3,750,000.

9.The lump sum was to be paid by instalments.  First, a payment of $250 million within three months and the balance of $120 million to be paid over six years in six equal instalments from 1 May 2013.

The wife’s appeal

10.The wife contends that the award is only 25.95% of the parties’ assets plus the total of the value of the Family Trust.  Her appeal is focused on two main issues. First, the whole of the Family Trust should be taken into account as the matrimonial assets and not merely two-thirds of it.  Second, she should be entitled to equal distribution of the matrimonial assets, namely, $832,499,370 or 50% of the matrimonial assets of $1,664,998,740 ($46,052,707 (the husband’s assets) + $58,259,660 (the wife’s assets) + $1,560,686,373 (Family Trust)).

The Family Trust

11.The Family Trust was set up in 1995.  Although it is Jersey based, it is locally operated.  The Trustee is a professional trustee, namely, HSBC International Trustee Limited.

12.The assets of the Family Trust comprised the shares in two companies, Analogue (being 84.63% of its shares) and 100% in Realty Limited when the trust was first set up.  The beneficiaries were the husband, the wife, K, the two deceased children and ‘any other person born hereafter who is a lineal descendant of the [husband]’.  The husband in his 5^th Affirmation dated 4 October 2011 set out the reasons for setting up the Family Trust :

‘ 50. It was correct that the Trust was set up in 1995. The reasons why I decided to take this step were:

1) first, the company was beginning to take off and doing well and envisaged to do even better.  It was thus that in those days, estate duty, which is of course abolished now, would be on any astute businessman’s mind.  I was thus advised by my financial and legal advisors that this was an appropriate and proper step to take in order to avoid estate duty and protect my family,

2) second, at all times, and even up to the present moment, I had no thoughts for anyone or anything else except to protect and provide for my family.  Thus it was that from the very word go, the beneficiaries of the Trust would comprise of myself, [wife] and our three children.  After [deceased daughter] and [deceased son] died, the family became a threesome and accordingly, the beneficiaries of the Trust comprise of myself, [wife] and [K].  My intention at all times was thus that the family fortune would be equally divided among our family members.  Even after the divorce, my intention had not wavered and my latest Statement of Wishes dated May 2010 continued to provide for an equal division of Trust assets among our family of three,

3) thirdly, the Trust was set up when my family were all still in Canada and the family were all expected to be Canadian citizens.  Setting up a Trust would be one way to minimise Canadian tax.

4) fourthly the Trust was established to mitigate the political risks for the business with the change of sovereignty in 1997.’

(For ease of reading, I have numbered the four reasons.)

13.Earlier in his affirmation dated 18 June 2010 the husband dealt with the beneficial interest of the Family Trust :

‘ From the very beginning when I started my trust in the 1990s, I had considered every member of our family to be equal partners and beneficiaries of my trust. Thus it was that even in those early days, the trust was always to be shared between the 5 members of our family. Now that we are only 3, it is and has always been my view and intention that my entire estate plus all [wife’s] assets, that is the total matrimonial or family assets, should be equally divided between the three of us - myself, the Respondent [wife] and our only remaining child, our daughter [K], now almost 40, an intelligent, absolutely reliable young woman, who now helps with and is totally involved with the management of my companies and is undeniably completely worthy and deserving of our trust. This offer had been made in writing to the Respondent at least 6 months ago but to-date the same had not been accepted.’

Structure of the Family Trust

14.It is not seriously challenged that the Family Trust has the following features :

1) It is a discretionary trust.

(1) The Trustee holds the capital and income in trust for all or such one or more to the exclusion of the other or others of the beneficiaries and in such proportions or manner as the Trustee shall revocably or irrevocably from time to time before the Vesting Date appoint……  (Clause 5(a))

(2) Before vesting the Trustee may apply the income to or for the benefit of all or such one or more to the exclusion of the other or others of the beneficiaries and in such proportions or manner as the Trustee shall in its absolute discretion from time to time think fit and the Trustee shall not be bound as such trustee to see to the application by any person of any moneys so paid to that person.  (Clause 6(a)) 

(3) After the vesting, and in default of an appointment of a charity by the settlor the Trustee likewise holds the capital and income on trust and discretionary power to distribute the same to the beneficiaries or any one or more of them to the exclusion of the other or others of them as the Trustee shall in its absolute discretion determine,….  (Clause 7(b))

(4) The Trustee also has the discretion to apply the trust fund to or for the advancement maintenance education or benefit of all or such one or more to the exclusion of the other or others of the beneficiaries and in such proportions or manner as the Trustee shall in its absolute discretion from time to time think fit…  (Clause 8)

2) The Trustee is given power to remove existing beneficiaries (Clause 3(a)) and appoint new beneficiaries (Clause 5(b)).

3) The husband is the Protector under the Family Trust.  He is given the power to remove and appoint the Trustee (Clause 18(a)).  His consent is necessary before the Trustee can alter, revoke or add to any provision of the trust deed and remove a beneficiary.

Letter of Wishes of the Husband

15.In respect of the Family Trust, the husband had issued Letter of Wishes (‘the letters’) to the Trustee.  In the letter dated 17 January 1996 the husband wrote :

‘ In considering whether and how to exercise your powers and discretions, it is my wish that you should consult with me during my lifetime and thereafter with my son. I would also like you to consider any suggestions put to you by me or, after my death, jointly by my wife, daughter and son and, if you consider them wise, to act upon such suggestions.’

16.In the letter dated 6 November 2000 the husband’s wish on consultation was expressed as follows :

‘ In considering whether and how to exercise your powers and discretions, it is my wish that you should consult with me during my lifetime and thereafter with my daughter, [K]. I would also like you to consider any suggestions put to you by me or, after my death, jointly by [wife] and [K] (or by the survivor of them) and, if you consider them wise, to act upon such suggestions.’

17.This was repeated in the letter dated 17 March 2005.  Finally in the letter dated 14 May 2010 the husband expressed his wish as follows :

‘ In considering whether and how to exercise your powers and discretions, it is my wish that you should consult with me during my lifetime and thereafter with my daughter, [K]. I would also like you to consider any suggestions put to you by me or, after my death, by [K] and, if you consider them wise, to act upon such suggestions.’

18.In these letters, the husband also expressed his wish on how the trust fund should be held after his death.  After the death of the daughter, the husband in the letter of 17 January 1996 stated that it was to be divided into six equal shares to be held for the benefit of the wife (one share), the son (one share and one additional share if he is an employee or director of Analogue), K (one share and an additional share if she is an employee or director of Analogue) and the Hong Kong Polytechnic University.

19.After the death of the son, the husband expressed the wish that the trust fund was to be divided into two shares each for the wife and K (Letters of 6 November 2000 and 17 March 2005).

20.In the letter of 14 May 2010, the husband expressed the wish that the fund was to be divided into three equal parts for the benefit of the wife, K and certain colleagues in Analogue.

Distribution of dividends

21.Realty Limited was used to purchase Twin Bay Villas, the matrimonial home in which the parties lived until their divorce.  The $6.8 million for the purchase of this property was advanced to the husband by the Trustee, a dividend from the Analogue shareholding by resolution of its Board.  Subsequently, at the request of the wife the husband asked the Trustee to transfer, for nil consideration, 99.9% of its shares to the wife with the remaining 0.1% to K as her nominee. Those shares therefore were transferred out of the trust and the wife was constituted the outright owner of that property.  This has been the only transfer of trust capital out of the trust which went to the wife.

22.As to Analogue’s shareholding, the Trustee has only paid out dividends to the husband as approved by the Board of Analogue.  These distributions are as follows :

1) $8,460,000 on 29^th March 2001;

2) $846,333 on 14^th March 2002;

3) $8,463,333 on 16^th July 2008;

4) $25,390,000 on 30^th July 2009; and

5) $25,390,000 on 21^st February 2011.

Position of the Trustee

23.The Trustee was joined as a party to the proceedings on 25 July 2011.  The position taken by the Trustee at the trial and in this appeal is a neutral one. However, while accepting that the Family Trust is a discretionary trust, the Trustee, represented by Ms Rattigan, resisted the wife’s contention that the whole of the Family Trust should be seen as a matrimonial asset available for distribution or that the Court should have attributed the full trust assets to the husband as a resource.  It is of the view that this would ignore the interests of K and other potential beneficiaries.

Jersey Law

24.According to Ogier, the wife’s expert on Jersey law, in respect of the power of the husband as a Protector, it is recognized that,

‘ Therefore while [husband] has the power to remove the current trustee, my view is that he would be subject to fiduciary duties in the usual way and there is little scope for arguing that they are personal to him and that he can exercise them without considering the beneficiaries generally.’

25.The expert further stated that,

‘ In terms of commercial reality, it is true that the trustee is likely to be guided by [the husband] and to take into account his wishes. I am reassured to a certain extent in that the trustee is a professional trust company rather than, for example, a close personal friend or adviser. The trustee is therefore likely to take its duties to act in the best interests of the beneficiaries seriously, and if it complies with [husband’s] wishes this is not likely to occur simply as a direct result of any veiled threat that [husband] might remove the trustee should it cause him offence. In fact the trustee could and should resist any purported exercise of this power if it suspected it was being exercised improperly. However, the trustee is likely to attach weight to the fact that [husband] is the settlor of the trust – and therefore the consideration of his wishes is a natural and proper part of the trustee’s role, provided it does not follow those wishes blindly – and because the assets within the trust represent [husband’s] family business assets, with which he is presumably familiar.’ (emphasis added)

The principles

26.Section 7 of the Matrimonial Proceedings and Property Ordinance (Cap 192) (‘MPPO’) requires the Court to consider the circumstances of the case including the ‘financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future (section 7(1)(a))’.

27.The Court of Final Appeal in KEWS v. NCHC (FACV 18/2012) considered the ambit of section 7(1)(a) in the context of financial assistance made by third parties to a married couple.  Ma CJ held that :

‘ 35. As stated in para 2 above, such third party assistance may take various forms. The authorities, to which I shall presently turn, show commonly trust situations or where relatives have provided financial assistance. There are of course other factual situations.

36. In every case where third party assistance is involved, there are two critical evidential questions for the court to consider:-   

(1) What is the extent of the financial assistance provided by the third party to the husband or wife?      

(2) What is the likelihood of such financial assistance continuing in the foreseeable future?’

28.The following are examples of how, in the context of an ancillary relief application, the Court would consider the interest of the parties who are beneficiaries of a trust.  In Charman v. Charman [2006] 1 WLR 1053, the English Court of Appeal considered a letter of request by the wife who instituted ancillary relief proceedings against the husband, for the trustee of an overseas trust set up by the husband to produce certain documents.  The relevant issue was whether the trust is a financial resource of the husband for the purpose of section 25(2)(a) of the Matrimonial Causes Act 1973 (the equivalent of section 7(1)(a) of our MPPO).  Wilson LJ (as he then was) held that the central question is simply whether :

‘ if the husband were to request it to advance the whole (or part) of the capital of the trust to him, the trustee would be likely to do so.’

29.Wilson LJ explained that the question is not whether the spouse has real or effective control over the trust because

‘ unless the situation is one in which there is ground for doubting whether the trustee is properly discharging its duties or would be likely to do so, it seems to me on reflection that such a formulation is not entirely apposite. On the evidence so far assembled in the present case, as in most cases, there seems no reason to doubt that the duties of the trustee are being, and will continue to be, discharged properly.’

30.In Charman v. Charman (No. 4) [2007] 1 FLR 1246, the English Court of Appeal upheld a lower court’s decision which included the assets in a trust as the parties’ assets.  The judge below rejected the idea that the trust was ‘dynastic’ in that it was set up for the benefit of future generations of the husband and not merely for the benefit of the existing beneficiaries.  The judge found that if so requested by the husband, the trustee would be likely to advance all the assets of the trust to him.  In upholding the judgment, Sir Mark Potter P held at [57] that :

‘ …...it is essential for the court to bring to it a judicious mixture of worldly realism and of respect for the legal effects of trusts, the legal duties of trustees and, in the case of off-shore trusts, the jurisdictions of off-shore courts. In the circumstances of the present case it would have been a shameful emasculation of the court’s duty to be fair if the assets which the husband built up in Dragon [Trust] during the marriage had not been attributed to him.’

31.The factors considered in that case included :

1) the husband was the settlor of the trust;

2) the trust’s wealth represents the fruits of investment at the husband’s request in companies which, substantially as a result of his talents, became very successful;

3) until after the breakdown of the marriage the operative letter of wishes was that he should ‘have the fullest possible access to the capital and income of the Settlement’; and

4) even now, his expressed wish is to be treated as the primary beneficiary.

32.In Whaley v. Whaley (2011-2012) 14 ITELR 1, Lewison J in the English Court of Appeal summarised the position as follows :

‘ [113] As I have said, a discretionary beneficiary has no proprietary interest in the fund. But under s 25 the court looks at resources; not just at ownership. Thus whether a beneficiary under a discretionary trust has a proprietary interest is not relevant. The resource must be one that is ‘likely’ to be available. This is the origin of the ‘likelihood’ test. No judge can make a positive finding about the future: the best that can be done is to assess likelihood. What is relevant is the likelihood of the trust fund or part of it being made available to him, either by income or capital distribution. If the husband were to ask the trustees to advance him capital, would the trustees be likely to do so (see Charman v Charman [2005] EWCA Civ 1606, (2005) 9 ITELR 43, [2006] 1 WLR 1053; A v A [2007] EWHC 99 (Fam) at [92], [2007] 2 FLR 467 at [92])? The question is not one of control of resources: it is one of access to them.

[114] In deciding that question the court must look at the factsrealistically. The court will not put ‘undue pressure’ on trustees to exercise their discretion in a particular way, but may frame an order which affords ‘judicious encouragement’ to provide one spouse with the means to comply with the court’s view of the justice of the case: Thomas v Thomas [1996] 2 FCR 544, [1995] 2 FLR 668. The cases do not say what amounts to ‘undue pressure’. But in Thomas v Thomas Glidewell LJ said what would not be undue pressure (viz if (a) the interests of other beneficiaries would not be appreciably damaged and (b) the court decides that it would be reasonable for the husband to seek to persuade trustees to release more capital to enable him to make proper financial provision for his former wife). Even if the court makes such an order the trustees are not bound to comply with the husband’s request; but it is ‘plainly proper for the trustees to take it into account ... and commonly it will be decisive’: Lewin on Trusts (para 29-157).’

33.The same approach was followed in the following cases : SR v CR (ancillary relief: family trusts) [2009] 2 FCR 69 (FD); BJ v MJ (Financial Order: Overseas Trust) [2012] 1 FLR 667 (FD); G v G (Financial Remedies: Short Marriage: Trust Assets) [2012] 2 FLR 48 (FD).

34.Ma CJ in KEWS disapproved of the term ‘judicious encouragement’ and emphasised that,

‘ 52. In my view, it is time to reiterate the approach that in the assessment of the financial resources of the parties to a marriage for the purposes of considering an application for ancillary relief under s 4 of the MPPO, the court is guided only by s 7(1), in particular sub-para (a) thereof. The term “judicious encouragement” does not call for a different approach when third party assistance is involved.’

The Judge’s view on the husband’s interest in the Family Trust

35.The Judge disagreed with the view of the wife (represented by Mr. Andrew Lynn and Mr. Patrick Siu) that the Family Trust in its entirety is to be regarded as a resource of the husband.  The Judge held that,

‘ 55. I am disposed to hold that in 1995, vis-à-vis his wife and his three children, the husband’s motives were entirely straightforward. He wishes to provide for all of them in the most effective way that ensured their futures. Since the breakdown of the marriage, I do not believe that his motives have changed, certainly not if one considers his various letters of wishes to the trustee. After the untimely passing of [daughter] and [son], he has now viewed the Trust as one in which the three surviving members of the family have an equal 1/3 interest. Subject to what I am going to say about the correctness or otherwise of Mr Lynn’s analysis of the Trust and the trustee-husband relationship, the husband’s 1/3 each perception is not a correct one. Everyone accepts that the beneficial interests are not fixed. This is a discretionary trust. The trustee is required to have regard to the interests of all of the beneficiaries.’

36.The Judge held that,

‘ 69……. This is not a Charman situation and I regret that Mr Lynn, who has invested so much effort into this part of the case, has decided to attach his wagon (if I may so describe it) to Charman. Whilst, of course, there are similarities between Mr Charman’s relationship to his Bermuda trust and the husband’s in this case, those similarities do not produce the same reality. Mr Charman’s behaviour was completely different to that of this husband who has always viewed his responsibilities to his wife (even after their divorce) and his children, now only [K], with the utmost concern for their best interests.’ (emphasis added)

The wife’s position

37.Mr. Lynn maintains his view that the whole of the Family Trust should be taken into account as the resource of the husband available for distribution as the matrimonial assets.

38.Mr. Lynn further submitted that the evidence showed that the husband alone has effective access to the Family Trust (in terms of the distribution), his ability to remove the Trustee in his position as the settlor of the trust and the deference of the Trustee to him.  The husband had also in court documents such as his Form E dated 14 July 2009, his Answer dated 19 September 2009, his letter dated 27 June 2008 and in his evidence showed that he regarded himself as the sole beneficiary of the Family Trust.

39.Mr. Lynn submitted that there was a material and tactical change of position of the husband and the Trustee from first asserting that the husband was the sole beneficiary to later contending that he only had a one-third interest in the trust.  Mr. Lynn further challenged the Judge’s finding that the husband had previously informed the wife that she was a beneficiary as against the wife’s case that she was only so informed in 2008.

Beneficiaries and trustees under a discretionary trust

40.Mr. Lynn has most ably referred to authorities on the nature of the interest of a beneficiary under a discretionary trust and the role of the trustees under such a trust.  I will, apart from stating the well established principles on this issue, refrain from going into the details of the cases.  First, the beneficial interest in assets of a discretionary trust vests in all the members of the class of beneficiaries as a whole (if a closed class) and no individual member of the class has a beneficial interest ‒ merely a hope or expectancy that the trustee will exercise its discretion and make a disposition of property in his favour: Lewin on Trusts at 1-06 ‒ 1-08; Snell’s Equity at 22-005; Smith, Public Trustee v Aspinall, Re [1928] Ch 915 at 918; Munro’s ST, Re [1963] 1 WLR 145 (Ch) at 148-149; Gartside v IRC [1968] AC 553 (HL) at 616F; Re Trafford’s Settlement [1985] Ch 32 at 38-41; Pettit, Equity and the Law of Trusts (12^th Ed 2012) at p.80.  Second, where the settlement does authorize the trustees to discriminate, as in the case of discretionary trusts or dispositive powers, it is meaningless to speak of a duty to act impartially between the beneficiaries.  The very discretion conferred is to prefer one over another; unfairness is not a ground of challenge.  Lewin on Trusts at 29-164.  Re Londonderry’s Settlement [1965] Ch 918 (CA) at 936; Edge v Pensions Ombudsman [1998] Ch 512 at 533, affd [2000] Ch 602 (CA) at 627-631, CA; Manukau City Council v Lawson [2001] 1 NZLR 599 (NZ HC) at 615-618; Underhill and Hayton at 44.2, 44.3, 4.16, and 57.11.

My view on the two-third interest

41.In my view the Judge was correct when he only took into account a two-third interest in the Family Trust as the resource that would likely be available to the husband for the purpose of assessing the matrimonial assets.  In so doing the Judge had expressly recognized that the husband’s view that the three of them each has a one-third share is not a correct appreciation of the position. However, the Judge considered (and I agree) that the Trustee in exercising its duty of safeguarding the interest of all the beneficiaries would not countenance any disposition which results in K’s interest being diluted below one-third. 

42.It is important to consider the context of this case.  This is not a case where the husband said that the whole of the Family Trust should not be taken into account.  On the contrary he accepted that it should be taken into account but only in a way that will not adversely affect K’s interest.  The husband’s avowed wish that the Family Trust is for the benefit of himself, the wife and K is a matter that the Judge can take into account when he considered the extent of the resource that will likely be available.  The husband’s decision to provide for K by the Family Trust is clearly pertinent having considered the tragedy that this family has endured by the loss of the two other children.  K is the only surviving child and heir apparent to the husband’s business empire.  It is natural for the husband to keep K’s interest away from the matrimonial dispute.  Many of the challenges raised by Mr. Lynn are factual issues which the Judge had clearly resolved when he accepted the wish of the husband.  The Judge’s conclusion is further reinforced by the stand taken by the Trustee and also by the Jersey law experts.  The wife’s indication that she has provided for K in her will is irrelevant to the issue under consideration.

43.Accordingly I will proceed to examine the other issues in this appeal on the basis that the matrimonial assets include two-thirds and not the whole of the value of the Family Trust.

When did the parties separate?

44.The next issue that calls for consideration is the date of separation of the parties.  The husband’s case is that the parties separated in February 2001 after the death of the son.  The wife said that they only became separated in 2008 when she discovered that the husband was keeping a mistress. Alternatively she said the separation occurred in February 2007, in order to recognize the ground of divorce which was based on two-year’s separation, the petition for which was presented on 6 February 2009.

45.By way of history, the wife herself had on 6 November 2008 presented a petition based on one-year’s separation.  The petition stated that the parties had separated since February 2001.  This petition was dismissed by consent in January 2009 and the husband then presented his petition.  The wife’s answer to the husband’s petition also stated that the parties had separated since 2001. The answer was then by agreement withdrawn and the husband’s petition then proceeded on an undefended basis.

Estoppel

46.The first hurdle that the wife has to overcome in asserting that the separation did not begin in February 2001 is the question of estoppel by reason of the divorce decree.  The Judge held that the wife was bound by the decree which was based on the 2001 separation as evidence of the irretrievable breakdown of the marriage.  The question is whether the decree which was based on the husband’s petition in which there was a reference to the parties’ separation since 2001 precludes the wife from now contending that the separation only occurred at a later time.  Ormrod J in Porter v. Porter [1971] P. 282 referred to the tension of two rival principles :

‘ It arises from a conflict between two issues of public policy; on the one hand, the desirability of finality in litigation, which means the very proper and reasonable wish to prevent the same parties litigating the same issues of fact in the suit, and again in chambers on ancillary applications; and, on the other hand, the importance in the interests of justice to the individuals concerned, that the discretionary powers of the court in ancillary matters should be exercised with a full knowledge of all the relevant facts, rather than on a basis, partly of fact and partly of assumptions, arising from such rules as estoppel. It is particularly difficult to do justice in so personal a field as matrimonial cases if the realities of the situation are allowed to be obscured by the application of rules or principles which in other situations assist the cause of justice.’

47.However the answer which reconciles this conflict is to be found in Hull v. Hull [1960] P. 118 where the principle stated is that estoppel operates to prevent a party in ancillary proceedings from challenging the ground upon which the decree was pronounced in the suit and from attacking the express findings of fact of the trial judge.

48.Applying this principle, the wife certainly cannot rely on separation that only began in 2008 because it will destroy the very foundation of the decree, namely, there was a two-year separation.  Section 11A (2)(d) of the Matrimonial Causes Ordinance (‘MCO’) (Cap. 179) states that the parties ‘have lived apart for a continuous period of at least two years immediately preceding the presentation of the petition.’  However, beyond that, the decree does not estop the wife from challenging the separation did not occur in 2001 because there was no full and proper inquiry in the divorce proceedings nor was there any express finding in the decree that the separation began in 2001. 

Mixed fact and law

49.Ms Anita Yip (who appeared for the husband together with Mr. McCoy SC and Mr. Eric Leung) submitted that there was no factual basis for the wife to rely on February 2007 as the relevant time of separation.  Certainly there is no reference in the evidence to this period of time but in my view the reliance on this time is really a practical solution in order to reconcile the requirement of honouring the integrity of the decree and at the same time allowing the wife to challenge in the ancillary relief proceedings that the separation already began in 2001.  As rightly pointed out by Ms Yip the basis of the wife’s ancillary relief application is upon granting a valid decree.  Sections 4 and 6 of the MPPO predicates ‘On granting a decree of divorce….’ 

50.Ms Yip further referred to the admissions by the wife in her Form E that the separation began in 2001.  In our view, ultimately the time of separation is a question of mixed fact and law.  While the Judge proceeded on the basis of the decree that the separation occurred in 2001, he had also made findings to the same effect.  I will repeat the Judge’s finding on this issue :

‘ 81. For the sake of completeness, and in the event that this judgment has to be considered in another court, I propose to address the evidence called on the issue of whether the parties were living separate lives, in separate households albeit, in the same house.

82. The starting point is the tragic death of [son] in 2000, after which the husband says the marriage, as a meaningful relationship, came to an end.  After that there were no affectionate feelings between the two of them.  Despite this, the parties moved to Twin Bay Villas in early 2001 where they continued to live under the same roof.  The issue to be decided is whether they were living separate lives, in effect maintaining two households.

83. What is agreed is that they had separate bedrooms.  On the decided cases to which I have been referred, this by itself is not enough.  The wife says that whilst this may well have by then become an unhappy and unfulfilling marriage, it remained a marriage.  She would polish his shoes, see to it that his laundry was done and if she did not always prepare his meals herself, they had a maid, she saw to it that his meals were prepared and kept warm for him if he returned home late.  They would sometimes have meals at home together and she continued to be a “corporate wife”, attending functions and entertaining, as his wife, clients from overseas as well as Hong Kong government officials and mainland officials.  They travelled together to the mainland on company business where she was seen to be his wife.  They even went on a cruise together to Greece and shared the same cabin.  For the first time in court she said that on one occasion they even had sexual intercourse which he has denied.  On one or perhaps two occasions she performed the “wifely” task of driving him to the airport when he had to travel on business.  Usually he employed a driver to do this sort of thing, who I presume on this occasion, was not available.

84. They even entertained together at home.  He would have barbecues for friends and for young engineers who the husband wished to encourage in their careers.  

85. This “modus vivendi” continued until the husband finally left the home and went to live elsewhere in 2008.

86. If I were to accept the wife’s evidence on the way that they ordered their lives until he finally departed in 2008, it could not be said, on any view of the matter, that these parties were living separate lives.  This would need to be viewed as a single household within an unhappy marriage that was, no doubt, in terminal decline.

87. The conclusion that I would need to come to is that after so many years together, the parties continued to live within the same single household almost as a matter of habit.  Whilst there was no tenderness, or feeling they still presented the outward appearance of a married couple appearing together at functions, travelling together on business, once going on a cruise and entertaining at home together.  This apart from the performance of wifely services like seeing to laundry, polishing shoes and on occasions having meals together and sometimes watching television programmes together.

88. The husband has even signed a statement at the wife’s insistence affirming their marriage.

89. His case is that by the time they had got to Twin Bay Villas, this was a hollow shell of a marriage.  He kept to his room when he returned home, turned on his computer for a while and then retired to bed.

90. As to the signing of the short statement, he says that she had put him under pressure to sign which he did to keep the peace between them.  He feared that if he did not, she might slap him or harm herself.  She had been screaming and yelling at the time.

91. He explained that his reasons for remaining in the house for so long was because he enjoyed the property and its location.  He had built the fish pond which he liked very much and he enjoyed the garden and the birdsong.

92. He accepts that there was laundry being done for him and the occasional meal was taken together with the wife.  Between 2001 and 2008 their’s was the bare shell of a marriage.  The essence of a matrimonial relationship had gone, by the time they arrived at Twin Bay Villas.

93. It seems to me that the fact that the wife had agreed in her petition, her Form E and by withdrawing her defence to the husband’s petition based on a 2001 separation, are also matters that I am entitled to take into account as part of the larger evidential picture in deciding the nature of the relationship between 2001 and 2008.

94. Taking all of the evidence as a whole I come to the following conclusions: Firstly, any tenderness or intimacy had ended by 2001.  I reject the wife’s evidence that the parties had engaged in sexual intercourse as recently 2008 as she has suggested in her oral evidence.  She had in fact said in cross-examination that the last time they had sex was in 2001, contradicting her evidence in chief.  Secondly, they occupied separate bedrooms.  Thirdly, communication was very limited.  Fourthly, they had occasional meals together at home.  These features lead me to the overall conclusion that none of the indicia of a matrimonial relationship were present. This was a bare shell and nothing more.  Accordingly, I find as a fact that they were separated, as the husband alleges, from February 2001.’

Principles on separation

51.Section 11C of the MCO expressly provides that ‘a husband and wife shall be treated as living apart unless they are living with each other in the same household.’  In the light of this provision, the starting point must be that if the parties were living in the same household they were not to be treated as living apart or separated unless the husband can establish that they were actually living as two households.

52.In Santos v. Santos [1972] 2 WLR 889 the parties, apart from short periods, had physically lived apart in England and Spain respectively.  The English Court of Appeal reviewed the earlier cases and held that at 896 and 897 the phrase ‘living apart’ when used in a statute concerned with matrimonial affairs normally imports something more than mere physical separation.  As to this additional element, it held that :

‘ it must be an element capable of being unilateral: and it must, in our judgment, involve at least a recognition that the marriage is in truth at an end—and has become a shell, to adopt a much-used metaphor.’

53.Sachs LJ at 900 concluded that :

‘ Therefore, “living apart” referred to in grounds (d) and (e) is a state of affairs to establish which it is in the vast generality of cases arising under those heads necessary to prove something more than that the husband and wife are physically separated. For the purposes of that vast generality, it is sufficient to say that the relevant state of affairs does not exist whilst both parties recognise the marriage as subsisting.’

54.In Fuller (otherwise Penfold) v. Fuller [1973] 2 All ER 650, the wife left the husband and lived with another man as his wife for four years together with her children.  The husband became ill and on discharge from hospital moved to the wife’s house where he lived as a lodger paying a weekly sum for four years.  Lord Denning MR at 652 held that :

‘ I think the words “with each other” mean “living with each other as husband and wife”. In this case the parties were not living with each other in that sense.’

55.Stamp LJ held at 652 that :

‘ I can only say that to my mind the words “living with each other in the same household” in the context of the Act relating to matrimonial proceedings are not apt to describe the situation where the wife is indisputably living with another man in the same household and her husband is there as a paying guest in the circumstances Lord Denning MR has described. Living with each other connotes to my mind something more than living in the same household : indeed the words “with each other” would otherwise be redundant.’

56.In the more recent Northern Ireland case of Dooris v. Dooris [2002] NI 121, the husband petitioned for divorce and relied on two-year’s separation.  The parties lived in the same household.  The petition was dismissed on the ground that the necessary degree of separation between the parties had not been established, relying, among other things, on evidence that although the parties did not share the same bedroom and the husband had his own study in the house, the wife cooked the meals, cleaned the house and laundered the husband’s clothes and, furthermore, that the parties ate together, were on civil speaking terms, and that the husband paid all the household bills.

57.The decision was affirmed on appeal.  Higgins J after reviewing the authorities including Santos, held at 127 and 128 that :

‘ …. Where parties remain living in the same residence, evidence is usually given that they live entirely separate lives. This may include—not sharing the same bedroom, living in their own separate quarters within the residence, not eating together, not cooking for one another or not shopping for one another, not socialising together, and not communicating with each other.

Thus in cases in which the parties continue to live under the one roof the question for the court is whether the evidence of the petitioner demonstrates that consortium was at an end and that there was that degree of separateness in their lives which justifies a finding that they were living in two separate households (albeit under the same roof) and were indeed “living apart”.  Whether the parties are living apart in separate households is very much a question of fact and degree.  However, the evidence must establish an absence of togetherness which is normally associated with living together in matrimony, as well as the necessary degree of separateness in the manner in which they conduct their lives.  Once the fact that the parties are living apart, in that sense, has been established, the court must then go on to consider whether the marriage has irretrievably broken down and decide whether or not to dissolve the marriage.

……Miss O’Grady submitted that the district judge failed to take into account that the parties no longer recognised the marriage as subsisting and that they had no intention to return to live as spouses.  These factors are not relevant to the issue whether the parties are in fact living apart.  They are relevant to the issue of irretrievable breakdown once the fact of living apart has been established.  That they slept in separate bedrooms and did not have marital relations are facts which are relevant to the issue of living apart, but of themselves are insufficient to prove that they were in fact living apart.  The fact that they ate meals together and that the respondent laundered his clothing are facts that are relevant to the issue whether the parties to the marriage are living apart and are required to be taken into consideration.’

58.In WLK v. TMC (2010) 13 HKCFAR 618, Ribeiro PJ at paragraph 105 expressly recognized that :

‘ There may be highly exceptional cases (such as where parties are unable to cohabit—because, for instance, they have high-powered jobs in different countries—but have children and otherwise generally conduct themselves as if they are married) where the absence of physical cohabitation may not stand in the way of treating them as in a de facto marital state.’

But he continued to state that :

‘ However, in the absence of such special circumstances, I can see no basis for construing the statutory powers and discretions to extend to relationships which do not involve cohabitation of the kind described above, however emotionally intense those relationships might be.’

This passage emphasized the importance of cohabitation in a marriage.  In my view this further points towards the heavy burden imposed on the husband in showing that they had indeed been separated while living under the same roof and living a life which to all outward appearance is that of a married life.

59.Many of the cases on separation are fact specific.  In EJB v CJB [2011] 5 HKLRD 508 this Court referred to the absence of ‘mutual emotional, economic and general support’ after the parties’ physical separation.

My view on separation

60.Drawing the threads together, in my view, it is plain common sense that when parties are not physically living together in the same place it does not mean, in the context of the MCO, that they are living apart or have become separated because they may be forced to adopt such a lifestyle by, for example, the nature of their work.  There must be a recognition by them that the marriage has come to an end.  On the other hand, where the couple is living physically in the same house, they can only be regarded as living apart or separated if they are living separately as two households, meaning they live entirely separate lives. 

61.With respect to the Judge, what he found at paragraphs 83 and 84 of his judgment does not support any notion of the parties living apart in two households.  It is simply not shown that there is the necessary degree of separateness.  In fact the Judge himself recognized this in paragraphs 86 and 87.  It is difficult to understand why on these facts as found, the Judge could then come to the conclusion that ‘none of the indicia of a matrimonial relationship were present.  This was a bare shell and nothing more.’  The Judge in paragraph 87 said that the parties ‘continued to live within the same single household almost as a matter of habit.’  He had not yet by that paragraph made a finding that indeed this was such a case.  However more importantly, ‘a matter of habit’ in the context of a marriage must mean the habits of a married couple such as sharing meals together, the wife cooking and doing laundry for the husband which were what had happened in this marriage.  Apart from having separate bedrooms, there was no other separateness in term of the use of the house.  In respect of lack of conjugal relationships, it should be noted that the couple were already in their 60’s when they adopted this way of life.  Outside of the domestic setting, the wife also performed the role of a ‘corporate’ wife, taking part in the social activities of the husband’s business.  In my view in relation to the issue of ‘habit’ it is not as Ms Yip submitted that they regarded each other merely as friends but to the contrary a married couple. 

62.Ms Yip attempted to overcome this by referring to the wife’s evidence that there was not even eye contact between them and the wife seemed to accept that the marriage had come to an end.  In my view, this is taken out of context of the wife’s evidence.  Reading her evidence as a whole, she was adamant that she regarded the marriage as subsisting until she discovered that the husband was keeping a mistress in 2008.  She insisted that she performed the duties for the husband because of her role as a wife. 

63.Further the evidence of the husband on why he remained in the same house as the wife belies any notion that he had regarded the marriage had come to an end in 2001.

‘ Q. …… the fact is you could have very easily moved out of the matrimonial home, you could have.

A. I could have, yes.

Q. At any time between 2001 and 2008.

A. Well, but I decided not to.

Q. You decided not to.

A. M’m.

Q. Yes.  Because you enjoyed the benefits that living in that home and being with your wife brought to you.

A. Okay, I enjoy the - - I have to say I enjoy, well, most the house, with the lawn at the front and the three terrace, the garden at the back and I hand-built a fish pond and we kept a lot of fish there and I think it was the - - it is this location which - - its unique location in a way that I enjoy staying in, and there in the garden the birds singing and I bought a couple of binoculars to watch the birds jumping from trees to tree, and, yes, that’s No.1.  No.2 is that I think we all have face, we, you know, Chinese people are so face conscious, I think a divorced person would be looked upon by his friends, his business associates and the community as an outclassed person.  And as a businessman running a business with a number of quite important public service on my shoulder, I do not wish to be seen by the community or by my business friends whatever to be divorced or to be separated physically because when I move out, everybody knows.

Q. That’s right and that is one of the benefits, isn’t it, [husband], that living together with your wife brought to you when you could have - - you could have left?

A. I could have left but I did not, I decided not to leave because of those reasons I’ve just mentioned.’

64.The husband cannot have the best of both worlds.  He chose to live in the same house with the wife as a married couple without the degree of separateness which may be viewed as two separate households.  The parties did not separate in 2001.  There is evidence that towards the end of the marriage, the wife performed less of her duties as a corporate wife.  By the decree both of the parties have to accept that there was separation from February 2007 onwards.

Post separation accrual

65.The Judge then proceeded to address the issue of post separation accrual.  He referred to Rossi v Rossi [2007] 1 FLR 790 which this Court recently applied in Z v X and C (CACV 166/2011, CACV 251/2011 and CACV 252/2011).

66.The husband relied on the fact the company grew at its fastest pace after the parties became separated in 2001.  This can be seen from a table of net profits from 2000 to 2010 :

Year	Net Profits
2000	$12,463,425
2001	$25,865,899
2002	$27,741,544
2003	$9,330,983
2004	$8,583,115
2005	($32,066,322)
2006	$17,031,022
2007	$55,526,026
2008	$78,049,582
2009	$161,760,278
2010	$293,077,695

67.However, it is not clear the extent to which the Judge relied on post separation accrual in departing from equal distribution.  The Judge first stated that some adjustment should be made in the husband’s favour because he held that :

‘ 99. ……the period of separation, over 10 years, is so substantial. It is a period over which the “ticking clock” of contributions by the wife, as I have described it, must be taken to have, if not stopped completely, slowed down.’

But then he continued to say :

‘ 99.……The reduction away from equality is extremely difficult to assess and on the facts of this case, where the issue of the company’s liquidity is a very much stronger factor in potentially driving the court away from equality, any reduction due to post-separation accruals is likely to be theoretical rather than real and which will be subsumed by the issue of the company’s liquidity.

100. For these reasons, I propose to leave over my conclusion on post-separation accruals and how these fall to be treated, to be considered with the company’s liquidity as an equality departure factor.’

68.The Judge then posed the question as follows :

‘ 126. The question now becomes one of whether it is appropriate and fair to reduce this prima facie entitlement by in excess of 30% in order to address the company’s liquidity and therefore ability to allow the husband sufficient funds to pay a lump sum without causing the company, for want of a better expression, significant commercial damage.’

69.After the Judge made the lump sum award of $370 million, he held that :

‘ 131. I have decided that this is a fair order to make in the circumstances of this case having regard to the way that the assets are overwhelmingly held in the shares of the private company. I should also make clear that I have considered whether the wife should also have transferred to her some additional shares in the company to make up some, at least, of the shortfall for her on her prima facie 50% entitlement. I have decided that this is neither necessary nor fair. The husband has built up this business himself, she has played no direct part in it. It may well store up trouble for the future of the company if the wife decided to sell her shares, although she says that she has no intention to do so.

132. I have left over the question of post-separation accruals and in circumstances where the wife is receiving substantially less than 50% of the available assets, I am satisfied that this order will address any argument which the husband has put forward in response to this part of his case.’

70.Counsel for the husband and wife addressed this Court that the Judge based his departure both on post separation accrual and the effect of an award on the liquidity of the company.

My view on post separation accrual

71.In respect of post separation accrual, I have come to the view that the separation only occurred in 2007.  Hence any spectacular growth between 2001 and 2007, even if it was indeed due to the husband’s efforts, is irrelevant.  As to the situation between 2007 and the day of trial, the growth of profits must be based on the business foundation that the company has built up from its earlier years.  While there is indeed a spectacular increase in the 2000 and 2010 profits, it should not be looked at in isolation without considering the non-monetary contribution the wife made towards the marriage until 2007.  This must, in any event, be properly regarded as ‘contribution’ which is one of the factors that are expressly referred to in section 7 of MPPO.  Hence I come firmly to the view that any post separation accrual is not the proper basis for departing from equality.  Further it must be borne in mind that the assets are under the control of the husband all the time.  The comment of Mance LJ (as he then was) in Cowan v Cowan [2001] 2 FLR 192 at 234 and 235 is apposite to this issue :

‘ [132] I start with Mr Pointer’s basic submission that the date of separation represents a cut-off date. I am unable to agree with it. I note that s 25(2)(a) itself requires the court, when exercising its power to make among other things a property adjustment order, to have regard to, inter alia:

“… 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 …” (emphasis added)

[133] Further, the date of the exercise of the court’s power is not only accepted to be the traditional date but is, as it seems to me, also the natural date in a case such as the present. Here the parties have lived apart, either content or obliged to wait before any divorce. The bulk of the assets was in the meantime the husband’s and under his control. He could do with it as he wished. She had no opportunity to use the assets or to increase them in the meanwhile. If the husband lost the moneys, the wife would suffer. If he added to them, one might expect the wife to benefit.’ (emphasis added)

72.In any event as this Court has held in X v Z and C, applying the Court of Final Appeal judgment of LKW v DD (2010) 13 HKCFAR 537, where the marriage is a long one, the importance of the source of the asset may diminish.  Hence any growth of profits between 2007 and 2011 must be considered in the context of this marriage which lasted 41 years.  Once this is put in proper perspective there clearly cannot be any justification for departure.

Departure based on liquidity of company?

73.As a matter of principle, I have serious doubts whether the liquidity or the lack of it of Analogue is a proper basis for departing from equality when the matrimonial assets as valued justify equal distribution in the first place.  True the assets are not in the form of cash but in my view, where liquidity is a real issue, the better approach is to address this problem in the structure of the order rather than to depart from equality by adjusting downwards the entitlement of the wife.

74.The wife in this appeal and below has asked for alternative forms of financial settlement other than immediate cash payment.  This includes transfer of shares of Analogue to her.  In this connection I agree with the Judge that there should not be a transfer of the shares as the wife has not taken part in its activities at all and giving her shares may as the Judge observed ‘store up trouble for the future of the company if the wife decides to sell her shares’.

75.Mr. Lynn criticised the husband for not providing proper evidence on the issue of liquidity and there is an application by the wife for new evidence to be adduced before this Court which challenges the husband’s evidence on liquidity.  We admitted the evidence on a provisional basis.

76.In the Court below, the single joint expert Mr. John Utting of KPMG who was instructed to value Analogue as of 31 December 2010, identified at page 31 of his report that there was surplus cash of $446 million.  The Judge stated that he accepted Mr. Utting’s evidence.  However, when it comes to the $446 million, the Judge held that :

‘ 128. Mr Utting was asked how much the company could raise and he said, looking at the cash surplus “well its got $440,000,000”. Mr McCoy says the husband can raise $250,000,000 almost immediately and a balance of $44,000,000 ($100,000,000 less, he says, $56,000,000 being the wife’s assets, on his then count) payable over three years.

129. The husband says any more would severely damage the company.  I do not take Mr Utting’s remark, he had not been asked to consider his answer with the sort of care that is required, that the company has over $446,000,000 in cash as conclusive by any means.  The fact is that this is a very well and carefully run company.  It is debt free.  It has been suggested that it would in any event be better to carry some debt.  For my part I do not consider that the husband should be forced, after all these years of careful stewardship of his company, to alter his admirable and successful business model.  As to the $446,803,000 (to be precise) cash surplus, this indicates that the company has a comfortable ability to declare a substantial dividend in favour of the husband without damaging itself and also to preserve sufficient cash reserves for its operations.’

77.In my view, the Judge’s view that he did not take Mr. Utting’s remark ‘that the company has over $446 million in cash as conclusive by any means’ is contrary to the evidence of Mr. Utting.  The relevant part of his evidence is as follows :

‘ Q. Mr Utting, I just have one final question. Now you will be aware that these are proceedings for financial relief and that the wife will be seeking an award. Now could you tell the court how much cash could be released from the group without appreciably damaging the group as an ongoing concern?

A. I haven’t been asked specifically to look at that.

COURT:  No, you haven’t, no.

A. One guide may be that in - if I can refer to the summary of the valuation, which is on page 31 of my report.  We do identify there surplus cash.  Now, obviously, this is at December 2010 and was the amount of cash that it appeared was not necessary for the ongoing operation of the business at that scale.  So that may be a guide ...

COURT:  That’s a way of looking at it.

A. Yes.  At least it’s a guide to the order of magnitude of cash that’s sitting in this company.’  (emphasis added)

78.Mr. Utting, who had prepared the valuation, stated that the $446 million ‘was not necessary for the ongoing operation of the business of that scale.’  Hence the amount can be deployed other than for the business of Analogue.  Further according to the audited Report and Financial statements of Analogue for the year ended 31 December 2011 which became available in August 2012 after the trial in October and December 2011, there was also a $227 million increase from $523,144,442 to $749,593,757 in the bank balances and cash between 2010 and 2011.  Accordingly, there clearly was evidence at the trial and before us that liquidity was not a problem which was used to justify a departure from equality.

Disposition

79.The length of the marriage and the contribution by the wife justifies an equal distribution of the matrimonial assets of $1,144.8 million.  Half of this sum is $572.4 million.  The difference of $572.4 million and $432 million awarded by the Judge is $140.4 million.  I will award the wife a lump sum of $510.4 million (i.e. $370 million + $140.4 million).  This sum is to be paid as follows :

1) $250 million within one month;

2) $130 million on or before 1 March 2014; and

3) The balance of $130.4 million on or before 1 March 2015.

Interest

80.The wife asked for interest to be paid on the instalment payments.  I will not order interest in view of the shorter time frame of the payment and the fact that the husband carries the risk of the business which generates the lump sum payment.

Conclusion

81.Accordingly the wife’s appeal is allowed to the extent as indicated.

Costs

82.At the hearing, I have directed the parties to provide written submissions on the Trustee’s costs.  The parties have since lodged their submissions.  The parties are now required to lodge within 14 days written submission on the costs of the appeal and below.  I will then address these costs issues together with the issue of the Trustee’s costs.

Hon Fok JA :

83.I agree with the judgment of Cheung JA.

Hon Macrae J :

84.I agree entirely with the judgment of Cheung JA and the orders he proposes.

Mr Gerard McCoy SC, Ms Anita Yip and Mr Eric Leung, instructed by Foo & Li, for the petitioner (13-14 December 2012)

Ms Anita Yip and Mr Eric Leung, instructed by Foo & Li, for the petitioner (27 February 2013)

Mr Andrew Lynn and Mr Patrick Siu, instructed by C.Y. Lam & Co., for the 1^st respondent

Mr Mairead Rattigan, instructed by Withers, for the 2^nd respondent

Please refer to FACV20/2013 and FACV21/2013 for the relevant appeal(s) to the Court of Final Appeal.