Lkw v. Ky
Read the full judgment text of HCA 192/2009 on BabelCite. This High Court CFI judgment was delivered on 29 May 2015 before HH Judge Bruno Chan.
Leave to appeal – Ancillary relief – District Court – Reasonable prospect of success – Disclosure of assets – Income assessment – Quasi-inquisitorial role – No order as to costs – The Petitioner Husband sought leave to appeal against a judgment on ancillary relief made by HH Judge Bruno Chan on 17 July 2014. The judgment ordered the Husband to pay maintenance to the Wife and transfer his interest in the former matrimonial home in Shenzhen. The Husband applied for leave to appeal on five grounds: failure to disclose interests in Fumin and Lung Kong properties, insufficient means to own properties, Wife's interest in aquarium business, account of RMB500,000 lump sum, and application of equal sharing principle. The court applied the test under s.63A(2) of the District Court Ordinance (Cap. 336) requiring a reasonable prospect of success. The court found the Husband failed to make full and frank disclosure of his interests in the properties, drawing adverse inferences. The court exercised its quasi-inquisitorial role to examine audited reports of the Husband's business, finding he had higher income than disclosed. The court relied on website information to find the Wife had no interest in an aquarium business. The court accepted the Wife's account of the RMB500,000 expenditure. The court held there was no reasonable prospect of success on any ground. Leave to appeal was refused. No order as to costs was made.
Legal issues: Disclosure of Fumin and Lung Kong Properties · Husband's Income from Business · Wife's Interest in Aquarium Business · Wife's Account of RMB500,000 · Section 7 Exercise on Distribution of Assets
Outcome: Leave to appeal refused.
Cited by 26 cases · Cites 4 cases
|
FCMC No. 530/2011 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 530 OF 2011 ----------------------------
----------------------------
--------------------------- DECISION --------------------------- 1.On 17th July 2014 I gave judgment after a trial of the question of ancillary relief and ordered the Petitioner Husband to pay HK$5,000 per month to the Respondent Wife for her maintenance until she dies or remarries, and to continue to pay for the mortgage instalments of their former matrimonial home until its discharge whereupon to transfer his half share and interest therein to the Wife in full and final settlement of all her other claims against him. 2.The Husband by way of a summons issued on 14th August 2014 now seeks leave to appeal against that judgment in that this court erred in law and/or in facts in arriving at those decisions and hence those orders be set aside. Before proceeding to consider his proposed grounds of appeal, however, it would be necessary to provide some relevant back ground of the case leading to my judgment. The Background 3.The full background of the case had already been set out in my said judgment, and I do not propose to recite them here save for those details which are relevant to the application now before me. 4.The parties were born and raised in China but the Husband became a Hong Kong resident in the 1980s. He met the Wife in the 1990s in Shenzhen where she worked as a restaurant waitress. They soon started a relationship and subsequently registered their marriage on 23rd November 1998, it being a second marriage for both and with the Wife’s daughter born to her first marriage accepted as a child of their family. 5.After the marriage the parties continued to reside in Shenzhen in their matrimonial home purchased by the Husband but put in their joint names, while the Wife quitted her waitress job to become a full time housewife and became wholly dependent on the Husband who ran his transportation business which owned several trucks shipping goods between Hong Kong and the Mainland. 6.In 2000 the Husband bought another property in Fanling, Hong Kong where the parties would stay from time to time when they were in Hong Kong. In the following year in 2001 the Wife gave birth to their son who was sadly born with a congenital heart disease that required regular medical treatment and attention. 7.In 2004 the Wife was granted a one-way visa to Hong Kong and came to work in a karaoke/nightclub but was arrested by police about a month later for allegedly working in a vice establishment. She was subsequently released without charge and returned to Shenzhen. 8.In about July 2009 the Husband believed that their marriage was at an end and moved out of their former matrimonial home in Shenzhen. In October 2009 the parties met to discuss possible divorce settlement during which the Husband offered to pay the Wife a lump sum of RMB500,000 as a clean break, a monthly sum of HK$8,000 for the maintenance of their son, and to transfer his interest in their joint Shenzhen property to her, and taht he was to retain his Fanling property and his business. 9.While it was in dispute whether there was any agreement reached between the parties after that meeting, the Husband did pay the said sum of RMB500,000 to the Wife a month later in November 2009, and also started to pay the said monthly sum of HK$8,000 for the son as well as HK$2,000 per month for the daughter. 10.Shortly thereafter the son was enrolled into a primary school in Hong Kong and stayed with the Wife in a rented flat in Shatin during school days while on weekends and school holidays they would return to the Shenzhen property. 11.In February 2010 the Husband sold his Fanling Property for HK$1,790,000 allegedly to repay a friend for lending him the RMB500,000 for his earlier payment to the Wife. In October 2010 the parties had a heated argument when the Husband accused the Wife for going back against their agreement by demanding for more money, while the Wife accused the Husband of cohabiting with a mistress in Shenzhen at what had come to be known as the Fumin Property and later at another property known as Long Kong Property, of which she suspected that he was the beneficial owner of either or both. 12.Eventually the Husband went ahead with his petition for divorce in January 2011 with the decree nisi subsequently granted in July of the same year together with custody of the son to the Wife, as the daughter was then already over the age of 18 but was still on full time education, while the question of ancillary relief primarily at that time over maintenance for the Wife and children as well as the former matrimonial home in Shenzhen remained in dispute. 13.Sadly the son died from his illness in July 2012 and hence the ancillary relief trial did not proceed until early 2014 when the Wife made her open proposal for the Husband to pay her monthly maintenance at HK$8,000 for herself as she had no income and HK$3,000 for the daughter who was then in university in Shenzhen, and for the transfer of the Husband’s interest in the former matrimonial home in Shenzhen to her free of mortgages, while the Husband’s counter-proposal was essentially for the said property to be sold with 55% of the net sale proceeds be to the Wife and the remaining 45% to him in full and final settlement of their respective claims against each other including over the said sum of RMB500,000 and the Husband’s transportation business, and no provision for periodical payments for her as he believed that she was running an aquarium business selling fish tanks in Shenzhen, and hence was capable of supporting herself. 14.Given their wide gulf as to their respective proposal, the parties therefore proceeded to trail during which the Wife appeared in person while the Husband was represented by counsel, with essentially the following major issues in disputes for the court’s determination:
15.As noted above after the trial I found that the Husband had failed to make full or frank disclosure of his interests in either or both of those properties and accordingly made adverse inference against him that he had interests in either or both, that he would have had the financial means and income from his transportation business to own either or both properties, that the Wife had properly accounted for the said sum of RMB500,000, that she had no interest in the aquarium business, and for the reasons set out in the judgment I made those orders referred to above, which led to the Husband’s application now before me, upon which the following legal principles apply. The Legal Principles 16.The Husband’s application is governed by s 63(1) of the District Court Ordinance, Cap. 336, and the threshold for granting leave is provided under s 63A(2) as follows:
17.The relevant test of whether an appeal has a reasonable prospect of success is as set out in the decision of Chu J, as she then was, in Wynn Resorts (Macau) S.A. v Mong Henry, HCA 192/2009 where she stated:
18.This test has since been adopted by the Court of Appeal in SMSE v KL [2009] 4 HKLRD 125, and more recently in TPL v WYY, HCMP 316/2013 when Fok JA, as he then was, stated in §6 of his judgment:
19.Furthermore, as regard an appeal against a judge’s discretionary decision in the application for ancillary relief, Kwan JA recently had this to say in PW v PPTW, CACV 224/2013:
20.It is with all these principles in mind that I shall now consider the Husband’s proposed grounds of appeal set out below. Proposed Grounds of Appeal 21.The Husband’s proposed grounds of appeal as originally set out in his draft Notice of Appeal annexed to his said summons essentially consist of 5 main categories in the Skeleton Submission of Ms Wong for the Husband who also represented him at the trial, which can be summarised as follows:
Fumin Property and Lung Kong Property 22.It was the Wife’s case that the Husband had concealed his interests in these 2 properties, neither of which were registered in his name, by relying mainly on the facts that he had resided in the former property where she discovered 4 renovation delivery notes amongst his belongings which were addressed to a man in the Husband’s surname and which linked to the latter property. 23.The Husband denied to have any interests in either property, admitting his only connection to them for having stayed in the former for only one month at his relative’s request to keep a watch of its renovation, and for having visited a friend residing at the latter for a few times. 24.In my judgment from paragraphs 62 to 90 I set out in details the basis and reasons of my findings on this issue including that the 4 renovation delivery notes could not have been fabricated by the Wife, that the Husband’s evidence on them were scanty and evasive, that I accepted the Wife’s evidence of how she obtained them, that I believed that the person surnamed Lau in them actually referred to the Husband, and that in the circumstances of all the evidence before me that the Husband had failed to fully and frankly disclosed his interests in those 2 properties, and hence drew adverse inferences against him in having beneficial interests in either or both of them. 25.In her submission Ms Wong argues inter alia that the court should not have found the Husband’s evidence as scanty or evasive as the transcripts of the trial reveal that he was neither as described. In my view the transcripts do not reveal any pause or hesitation on the part of the Husband, let alone his demeanor in answering questions, but that I was also entitled to arrive at that conclusion by taking into account of his change of his evidence on those delivery notes when he first stated in paragraph 13 of his 2nd Affirmation that “ … Those barely legible delivery notes contain nothing which arguably points to me, not to say conclusively. Even the barely legible words “劉生” are neither here nor there” butlater admitted in his testimony that he was indeed the Mr Lau referred to in the 1st delivery note (“KY-7”) in respect of the Fumin Property. 26.Furthermore, upon finding that the Wife could not have fabricated the other 3 delivery notes in relation to the Lung Kong Property based on my observations of her in court and the type of renovations mentioned in those notes, and accepting that she found them amongst the Husband’s belongings at the Fumin Property, and given the Husband’s failure to provide any logical or credible explanation as to how he was connected by those notes to the Lung Kong Property other than his occasional visits of his friend at that property, and in the absence of any possible logical conclusion other than that he was interested in that property, I am unable to see how my findings that he had failed to make full or frank disclosure of his interests in that property and that adverse inference should be drawn against him in the circumstances can be criticised, or that this ground can be said to have any reasonable prospect of success. The Husband’s Income from Business 27.This issue in dispute was relevant not just as to whether the Husband’s income from his transportation business was able to meet the Wife’s claim for monthly maintenance but also whether he could afford to own either one or both of the Fumin Property or Lung Kong Property as suspected by the Wife, and it was all along plain in both her affirmations and testimony at the trial that she disputed the Husband’s disclosed income including the number of trucks his company owned and operated as well as its disclosed profits, and as he was the sole beneficial owner of that company known as Goldway Transportation which was the sole source of his income, hence this court was obliged to consider and examine its audited reports and financial statements disclosed by the Husband in order to ascertain his income. 28.In my judgment on this issue from paragraphs 46 – 58 I identified those issues and proceeded to examine the audited reports and financial statements by adopting the straight forward approach by setting off the stated expenses from the revenue or gross profit to arrive at the net profits which may or may not have been distributed to the Husband but were nevertheless available for distribution if he so wished, and by discounting or adding back the notional amount allowed for the accounting term of “Depreciation Value” and by taking into account of the stated “Entertainment Expenses”, plus the fact that his bank records also revealed much more substantial deposits than his disclosed income, I arrived at the conclusion that the Husband was in fact earning or capable of earning more than he had disclosed. 29.Ms Wong for the Husband argues that since the Wife never during the trial challenged those reports or statements including their authenticity or their accuracy, it was therefore wrong or inappropriate for this court to step into the arena of an expert to explain and interpret them in particularly as to the terms and sums under “Depreciation Value” and “Entertainment” to arrive at a conclusion of which the Husband was never aware as the issues, nor was he given any opportunity to address them at the trial if they were. 30.In ancillary relief litigation, the quasi-inquisitorial role of the court has been well established and reflected in Thorpe LJ’s comment in Parra v Parra [2003] 1 FLR 942 at §22:
31.This comment of Thorpe LJ was in fact cited with approval by the Court of Final Appeal in the now seminal case of LKW v DD [2010] 13 HKCFAR 537 at §69, and was recently revisited by the same court in Mimi Kar Kee Wong Hung v Raymond Kin Sang Hung, FACV Nos.10 & 11 of 2014 when the Chief Justice commented on how far that particular role of the court can go in matrimonial litigation:
32.Although the Wife in this case was legally represented throughout the stage when issues were identified and cases were pleaded, and as noted above which were well and clearly reflected in her affirmations of her disputes inter alia over the Husband’s business income, by the time of the trial she became unrepresented and it was clear to me that she was unable to read or understand English, in which most of the Husband’s affirmations and financial reports were, and barely capable of properly expressing herself in court, let alone to master the art of cross-examination or submission on the evidence, clearly she was in a disadvantaged position compared with the Husband and thus necessitating the court’s inquisitorial exercise on those reports on its own motion, not to mention its statutory duty to investigate the Husband’s means, and for that matter the Wife’s as well, under the Section 7 exercise of the Matrimonial Proceedings and Property Ordinance, Cap192. 33.Furthermore, if that exercise was regarded as procedurally wrong in denying the Husband the opportunity to explain or address those issues during the trial, he should have stated so in an affirmation in support of his leave application and to adduce such evidence, but which he has not done so. In the premises I fail to see how such ground can be said to have any reasonable prospect of success. The Wife’s Interest in Aquarium Business 34.The Husband’s case that the Wife had been running this business was based primarily on a business card of the Wife stating to be the boss of the aquarium shop which he claimed to be attached to a leaflet obtained by him at the shop and produced as his evidence. In my judgment [§26 – 36] I found that the Wife could not have the capability or means to own and operate this business based inter alia on her own personal background and evidence and also on the information obtained from a website printed on the leaflet about the company which owned this business. 35.The Husband’s main ground against these findings is similarly that it was procedurally wrong or unfair for the court to rely on information obtained from the website and without providing him the opportunity to address or rebuke them in court. 36.As the website information were part of the evidence produced by the Husband, I fail to see why the court was not entitled to form its own interpretation, but the point must again be that if indeed it was procedurally wrong or unfair to the Husband not to have been afforded any opportunity to address the court on those information obtained from the website, there is however no such application by him to do so, and if those information are in fact true and accurate, then what prejudice would he have suffered as a result? In the premises I again fail to see how he would stand any reasonable prospect of success with this ground. The Wife’s Account of RMB500,000 37.In my judgment [§37 – 45] I accepted the Wife’s evidence that by the time of the trial most if not all of this sum had been depleted mainly on her living expenses, the daughter’s school expenses, her mother’s medical fess and her legal costs incurred in the divorce proceedings, and hence did not accede to the Husband’s request to include this sum in the parties’ marital assets for division. 38.The Husband’s ground on this issue is essentially that since in addition to this sum of RMB500,000, he had also paid the Wife HK$8,000 per month as maintenance, and hence the court should not have accepted the Wife’s evidence that she had to rely on the RMB500,000 to meet her living expenses. 39.This argument of the Husband is not entirely accurate, as the monthly sum of HK$8,000 were for the son only as he admittedly proposed at their meeting in October 2009 when he offered to pay the W that sum of RMB500,000 as a clean break in full and final settlement of her maintenance claims, and that after the son’s death in July 2012 he had stopped paying that monthly maintenance of HK$8,000, and hence the argument that he had continued with that payment is both wrong and misleading. 40.In the premises and having accepted the Wife’s evidence of how she spent most of that sum as set out in §39 of my judgment, I fail to see how this ground of the Husband can stand any reasonable prospect of success on appeal. Section 7 Exercise on Distribution of Assets 41.This ground of the Husband, as clearly stated in Ms Wong’s Skeleton Argument, is premised on the basis that this court did err in the various factual findings referred to above, but otherwise as it is not the Husband’s argument that this court should not have exercised its discretion in arriving its conclusion or exercised it wrongly, in the circumstances and having already rejected all the Husband’s grounds of appeal against those factual findings referred to above, it follows that there is also no reasonable prospect of success for this ground. Conclusion 42.In the premises and accordingly, the Husband’s leave application is refused. Given that the Wife is unrepresented and made little argument at the hearing other than that she opposed the application, I am of the view that it would be appropriate to make no order as to costs, which is an order nisi to be made absolute at the expiration of 14 days.
Ms Linda Wong instructed by M/S Paul W. Tse for the Petitioner. The Respondent appeared in person. |
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under HCA 192/2009