Read the full judgment text of FCMC 13874/2013 on BabelCite. This Family Court judgment was delivered on 1 April 2015 before Her Honour Judge Sharon D. Melloy.
Matrimonial Causes – Separation Agreement – Binding Agreement – Duress – Undue Influence – Maintenance – SMS Negotiations – District Court – SPH v SA FACV 22 of 2013 – Radmacher v Granatino – LKW v DD [2010] HKEC 1727, (2010) 13 HKCFAR 537 – L v C [2007] 3 HKLRD 819 – CACV169 of 2006 – The court determined whether the parties entered into a binding separation agreement in or about June 2011. The wife contended that a binding agreement was entered into and varied twice, while the husband argued they were negotiating terms and denied any binding agreement. The court applied principles from SPH v SA FACV 22 of 2013 and Radmacher v Granatino regarding the weight to be attached to nuptial and separation agreements. The Supreme Court stressed that courts are not obliged to give effect to such agreements but must give appropriate weight. The court found that the parties had not received legal advice at the beginning and there was no written agreement. The husband felt pressured due to the wife's emotional state and depression. The SMS messages showed ongoing negotiations without clear offer and acceptance. The husband paid maintenance temporarily due to guilt and pressure, not long-term intent. The court concluded there was no separation agreement as such. The parties were negotiating terms. The husband is not bound by any agreement. The wife was warned of cost consequences but insisted on proceeding. The wife shall pay the husband the costs of and occasioned by this preliminary issue application. The wife shall also pay the wasted costs arising out of difficulties with the provision of the SMS messages on an indemnity basis. The court found that there was undue influence surrounding the issue of maintenance and the husband felt pressured at times to give into the wife’s demands. The court accepted that the wife was greatly affected by the separation and was suffering from depression. The court found that there was no such agreement and for the avoidance of doubt that the husband is not bound. The court did not need to consider whether the agreement should be set aside because of duress as there was no agreement. The circumstances of the parties at the time of the agreement included their age and maturity and whether either had been married before. The court considered whether the marriage would have gone ahead without an agreement. The terms of the agreement were not unfair from the start but the question was whether the agreement operated unfairly having regard to the circumstances prevailing at the time of the breakdown of the marriage. The court found that the initial messages amounted to little more than very sensible discussions about the way forward following the breakdown of the parties’ relationship. The parties were negotiating between themselves. The husband felt that he had a moral obligation towards the wife and that he wanted to do the right thing. He intended to provide her with an unencumbered home and maintenance during the period of the separation pending a divorce. He did not intend to provide her with maintenance ad infinitum. The husband was good to his word and moved out of the matrimonial home on 1 July 2011. He redeemed the mortgage on the property and transferred it to the wife. In October 2011 the husband began paying the wife HK$15,000 per month pursuant to her further request. The wife says that this amounts to a variation of the original agreement. The husband says that he agreed to pay this increased sum because he did not wish to argue with her any more. The wife then says that the agreement was further varied on or about October 2012 when she requested that the husband pay her HK$16,000 per month as maintenance. The husband says that he reluctantly agreed to this as it was only an additional HK$1,000 per month. It seems to me that this also formed part of the ongoing discussions and negotiations between the parties at that time. Finally there were negotiations between the parties prior to the husband issuing divorce proceedings. On 9 July 2013 the wife wrote to the husband attaching a short draft agreement in Chinese which she asked the husband to sign. The husband responded suggesting that he pay HK$17,000 per month with a 3% increment and that the maintenance continues to be paid until the wife remarries or he ceases working full time. He also refused to admit to adultery. However this counter proposal was not accepted by the wife. Instead she wrote to him again on 6 August 2013. The husband refused this proposal outright. He says that it was simply unaffordable. Further it was only at this stage that he finally sought legal advice. He says that he was subsequently told that he may not need to follow this arrangement and consequently he stopped paying any maintenance to the wife. The wife for her part says that the husband should be bound by his original counter proposal which she had not accepted. It is hard to see on any analysis how that can be correct. Put simply there had been no offer and acceptance. Looking at the SMS messages as a whole it is clear that on a true construction of the same the husband had not agreed to pay the wife maintenance on an ongoing basis. The two draft agreements referred to above were sent to the husband by the wife in contemplation of divorce and that they formed part of the ongoing negotiations between them. It is equally clear that no agreement was reached. Divorce proceedings were subsequently issued on 30 September 2013. In summary and with respect to the guidance provided by the Court of Final Appeal in SPH v SA in paragraph 3 above, it is clear from the evidence that the following points are relevant and are worth repeating. The court accepts the husband’s case that there was undue influence surrounding the issue of maintenance and that he did feel pressured at times to give into the wife’s demands. The court accepts that he originally gave into that pressure because he felt guilty, he was concerned that the wife might harm either herself or him and he did not wish to argue with her. It seems to me that this is material. Likewise the court also accepts that the wife was greatly affected by the separation and that she was suffering from depression. She was still receiving treatment at the time of the hearing. It is clear that the parties had not received any legal advice at the beginning of the separation. The husband says that he sought legal advice immediately before he issued divorce proceedings. It is not clear when the wife first received legal advice. The husband did not intend that he should pay maintenance to the wife in the longer term. This was never fully discussed between the parties. The court accepts that the husband did intend that the wife should retain the matrimonial home and that he had no difficulty with her selling the same, although initially he had some concerns about when it might be the right time to sell. The court accepts that there was undue pressure and that this in turn might affect the weight to be attached to the agreement in the event that such an agreement existed. It seems to me that there was no such agreement. In this instance the court should add that there was no written agreement and nothing was witnessed. Further there was no formality to the discussions. The legal ramifications of their discussions were not discussed. For example there was no suggestion that there should be a clean break or a dismissal of claims. In fact initially there was no reference to a divorce either. All in all it seems to me that there was no separation agreement as such. Instead the parties were negotiating terms. Given that there was no agreement there can be no suggestion that the husband should be bound in any way. Given these findings it seems to me that it is not necessary for the court to consider whether or not the so called agreement should be set aside because of duress. The court would add that it is clear that this was a highly charged situation and that the wife’s emotional stability was a matter of some concern. As indicated above the court accepts that the husband may at times have been concerned to appease the wife and that this may have influenced his approach to the negotiations. In conclusion then, in answer to the question posed as a preliminary issue, i.e. whether or not the parties entered into a binding agreement in or about June 2011, the answer to that must be no. The court finds that there was no such agreement and for the avoidance of doubt that the husband is not bound. The wife was warned on several occasions of the cost consequences of proceeding with her claim. However she insisted. In such circumstances the court will make an order nisi to be made absolute in 28 days time that the wife do pay the husband the costs of and occasioned by this preliminary issue application, to be taxed on a party and party basis if not agreed. Further the Respondent shall pay the wasted costs arising out of difficulties with the provision of the SMS messages. 1 hour and 10 minutes was wasted. The wife shall pay the costs of that on an indemnity basis. There shall be certificate for counsel.
Legal issues: Existence of binding separation agreement · Costs of preliminary issue application
Outcome: No binding separation agreement found; husband not bound.
Cites 1 case