Yyk v. Tscj (Now Known As Tkw)
Read the full judgment text of FCMC 5141/2010 on BabelCite. This Family Court judgment before Deputy District Judge G. Own.
Matrimonial Causes – Ancillary Relief – Non-disclosure – Adverse Inference – Asset Distribution – 60:40 Split – Costs – Husband concealed assets and income – Wife had mental health issues – Illegality claim dismissed – $600,000 from father held on trust – Property B no beneficial interest – $400,000 cash gift not proven – Lump sum $1,627,200 awarded – Periodical payments $15,000 per month ordered – Costs to Wife.
Legal issues: Illegality Application · Wife's $600,000 from Father · Husband's Income and Assets · Property B Beneficial Interest · $400,000 Cash Gift · Distribution of Matrimonial Assets · Costs Order
Outcome: Wife awarded lump sum of $1,627,200 and periodical payments of $15,000 per month; Husband ordered to pay costs.
Cites 1 case
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FCMC 5141 / 2010 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 5141 OF 2010 ----------------------------
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------------------------- J U D G M E N T ------------------------- Background 1.This is the trial of the Respondent Wife (“Wife”) claim against the Petitioner Husband (“Husband”) for ancillary reliefs. 2.The parties were married on 20th December 1997 in Hong Kong. There is one child born out of the marriage, a boy, who is at the age just over 12 ½ years at the commencement of this trial. These divorce proceedings were commenced by the Husband in April 2010 relying on the fact of “Unreasonable Behaviour”. Decree Nisi was granted on 6th October 2010. On 25th October 2010, His Honour Judge K.W. Wong adjourned the question of custody for trial with 2 days reserved. 3.On 14th September 2010, a Notice of Application for Ancillary Relief was filed by the Wife’s lawyers. 4.On 16th June 2011, a Consent Order was granted by His Honour Judge K.W. Wong whereby custody of the child was granted to the Husband with reasonable access be given to the Wife. 5.At the commencement of trial, the Husband was aged 43 and his reported occupation was ritual attendant/marketing consultant. The Wife was aged 39 and was a housewife. 6.Both parties are legally represented at the time of trial and have agreed that the trial be conducted in English. The Wife arranged her father as witness to testify and also issued a subpoena duces tecum to the Husband’s brother for attending the trial to produce certain documents. Joint Statement of Issues 7.Parties have set forth and signed a Joint Statement of Issues as follows :-
8.For the sake of completeness, Property B refers to the property at Flat D, 1st Floor, Block xx, XXXX, No.xx Siu Lek Yuen Road, Shatin, New Territories, Hong Kong, which was registered in the sole name of the Husband’s brother. Property B was used by the Husband and the child of the family since around 2007 up until now after the Husband disposed of the former matrimonial home around 2006. The Wife’s latest Open Proposals 9.The Wife proposed as follows :
The Husband’s latest Open Proposals 10.The Husband proposed as follows :
The question of “Illegality” 11.In the afternoon of the first day of trial (that is, 22/10/2013) after the Wife has started her evidence in chief, Mr. Eric C.K. So acting for the Husband suddenly made an oral submission for immediate dismissal of the Wife’s ancillary reliefs claim in its entirety. The basis of such application was that the Wife at paragraph 15 of her 1st Affirmation (at Trial Bundle TB – page 84) deposed that the Husband, apart from other business activities, had also engaged in business like illegal off-course soccer betting and also Mark Six betting. She adopted such affirmation as her evidence in chief. 12.I should say such application came up ‘out of the blue’ of which, on all fairness, advance notice should have been given to the Wife’s Counsel. Considering the draconian nature of the application, the trial was temporarily suspended in order to receive oral submission from Mr. So. It was then adjourned to the following day (that is, 23/10/2013) for further disposal with directions for Mr. So to submit his written formal application and grounds of application. Trial on ancillary reliefs in family cases procedurally differ from trials in criminal cases, especially those in magistrate courts, where from time to time defence counsel may seek a ruling from the court to ‘stay’ the criminal trial without any notice being given to the prosecution. 13.On the following day, Mr. So continued his submission and Counsel Mr. Wong for the Wife had also replied. Leave was granted for Mr. So to file a proper Summons by 11:00 a.m. on the following day, namely, on 24 October 2013. 14.Upon consideration, this Court granted the following Orders in respect of Mr. So’s application and an ex tempore Decision was delivered :-
15.Strangely enough, the Husband’s solicitors Mr. Eric C.K. So in his written Final Submission of this ancillary relief trial re-visited the question of illegality. As rightly submitted by the Wife’s Counsel in the written Closing Submission in reply, such question has been decided and thus was res judicata. No appeal was launched by the Husband for the Court’s decision and in now so doing, the Husband or his lawyers are simply attempting a second bite of the cheery, if not an abuse of process. 16.I agree with Counsel Mr. Wong. There will be no consideration of this part of Mr. So’s written Final Submission by this Court. The Law on Ancillary Relief 17.The jurisdiction of the Court in granting financial relief for a party is governed by section 4 of the Matrimonial Proceedings and Property Ordinance, Cap 192(“MPPO”) which provides:
18.The governing principles in relation to the distribution of the family assets in dissolution of marriage are set out in section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192, (“section 7 factors”) which states as follows:
19.In the leading case of LKW v DD[1] the Court of Final Appeal sets out 4 principles as to how section 7 shall be approached, which are stated as follows:
20.The Court of Final Appeal went further to lay down 5 steps as to how the Court should do when exercising section 7 as follows:
The five (5) Issues Issue (a) - The sum of $600,000 received by the Wife 21.It is undisputed that the Wife had received a sum of $600,000 from her father around 2007. The Wife’s case is that such sum was placed with her on trust for her father for investment in the stock market. All the moneys were lost by 2008/2009 in the stock market. 22.The Wife’s case on this issue had not been challenged by the Husband’s lawyers. According to the records of hearing, not a single question was put by Mr. Eric C.K. So, who represented the Husband at trial, to the Wife’s father during cross examination to discredit the Wife’s case of the sum of HK$600,000. In Mr. So’s written Closing Submission, there is no submission either as to why no such question was put to the Wife’s father. 23.In the absence of any contradictory evidence or challenge, I find for the Wife that the sum of HK$600,000 was money held on trust for her father and therefore did not fall within the pool of family assets for distribution. Issue (b) – What has been and is the income of the Husband ? 24.The Husband’s evidence is that prior to 2009 he was engaged in different businesses including trading in electrical goods and piece goods wholesale in Mainland China, also in the business of selling the so-called ‘twisted- eggs’ and some electronic games in Hong Kong. On 1st March 2009, he was employed by a Macanese company by the name Kyle Support & Adm Software Overseas Limited (‘Kyle’) as a ritual attendant/marketing consultant. His role and job duties with Kyle were to arrange hotels, ferry tickets and catering for customers (either from Mainland China or Hong Kong) who were interested to travel to and gamble in Macau. His salary was allegedly $50,000 at the beginning but was reduced to $30,000 around September 2010. The Husband’s case is that since the source of income was earned outside Hong Kong, he was not required to report his salary for tax purposes in Hong Kong and thus could not produce any official proof of income. The only documentary evidence available, insofar as his employment and income is concerned, is a letter issued by Kyle dated 27/9/2010 (at Trial Bundle TB - 1470). 25.Eventually, Kyle closed down in October 2010 and he remained unemployed until 2011 when he returned to the same line of business as Kyle with some of his friends. No company had ever been formed or his business activities been registered up until now. His present level of income allegedly was variable between $20,000 and $30,000 per month. There is also no documentary evidence or tax return to support such alleged income of the Husband. 26.Under cross examination, the Husband stated that he had had no other business since he was employed by Kyle. At one stage he was involved, only on a temporary and short term part time basis, in sales activities for a printing company and a security equipment company but both of which did not yield any income to him. 27.Counsel Mr. Wong for the Wife submitted that the only piece of documentary evidence of Kyle adduced by the Husband cannot be conclusive proof of his income. Reference was then made to the records of the personal bank accounts of the Husband. There are numerous entries of transactions where different sums of moneys were deposited and withdrawn, some of which were of large amount. There were transactions running up to $400,000 and also one transaction of about 1 million of which the Husband, in his evidence, explained that it was a loan to Kyle for payment to the casino in Macau. This incident arose out of a ‘miscount’ of bank notes and he had to seek his brother’s assistance for a loan of $400,000. The Husband deposed that those transactions appeared in his personal bank account were either payments received from or paid to his customers or received from or paid to the casinos. Those were not his income. 28.The Wife in her 4th Affirmation stated that before the separation, she believed the Husband’s monthly income was already not less than $100,000. She deposed that the household expenses in the few years before separation was about $60,000. By that time the Husband was paying her a monthly maintenance of $15,000 and that the Husband himself was spending about $20,000 a month. All these sums, say, $60,000 plus $15,000 and $20,000 added together was close to $100,000. Moreover, the Husband would go to Macau every Thursday for some meetings and would also be receiving a fixed sum of $50,000 as remuneration. 29.According to the documents produced by the Husband, for the years between 2008, 2009 and 2010 a total sum of $817,420 was paid by the Husband either into the Wife’s father’s bank account or the joint name account of the Wife and her father. For the breakdown, a total sum of $125,420 was paid in 2008, another total sum of $329,700 was paid in 2009 and a further total sum of $362,300 was paid in 2010 (see paragraph 16(1) of the Wife’s 4th Affirmation). 30.The Husband also received a sum of $231,900 from his Macau business between 2008 and 2010 (see paragraph 16(2) of the Wife’s 4th Affirmation). 31.Besides, there are other sources of income from his business of sale of twisted-eggs, electronic games and computer products which was revealed by the Husband’s documents or his answers to questionnaires adding up to $1,374,342 between the years 2008 and 2010 (see paragraph 16(3) of the Wife’s 4th Affirmation). 32.The Wife in her 10th Affirmation deposed that her younger brother had once worked for the Husband in Mainland China for a few years. This was confirmed by the Wife’s father’s testimony in Court and in his affirmation filed on 19 March 2012. Such fact was not disputed by the Husband. 33.The Wife in her 10th Affirmation produced as an exhibit marked “TKW-18” which is a list (at Trial Bundle TB - 552) obtained by the Wife’s younger brother from his ICBC Bank account No.6222xxxxx004050xxxx showing the following sums were transferred to a bank account at the Zhu Hai branch of the Agricultural Bank of China (“ABC”) No. 6228xxxxx003725xxxx with the Husband’s sole name as account holder. This ABC bank account had never been disclosed by the Husband.
34.Besides, within the same exhibit, there was an outgoing entry of transfer from the Husband’s ABC bank account to the Wife’s younger brother’s ICBC Bank account in the sum of RMB 2000000 on 26th July 2011. 35.The Wife in her 12th Affirmation produced as an exhibit marked “TKW-24” (at Trial Bundle TB – pages 1283 to 1294) documents received from the Zhu Hai branch of the Agricultural Bank of China which consists of details of breakdown of entries for the Husband’s ABC Bank account. Upon checking and comparing the figures in this exhibit with Exhibit marked “TKW-18”, it can be seen that the amount of those transactions which appeared in exhibit “TKW-18” should in fact read as follows :-
36.Thus, the exact amount transferred by the Wife’s younger brother to the Husband as per the 5 transactions appeared in exhibit “TKW-18” should be RMB 1,581,740 instead of RMB 158,174,000 (that is to say, with the decimals included). Applying an exchange rate of, say, RMB 1 to HK$1.20, this is equivalent to HK$1,898,088. 37.Putting all these together, the Wife believed the Husband has undisclosed bank account where there were substantial sums of monetary transactions which call for full explanation. The Wife deposed that she believed the then monthly income of the Husband between 2009 and 2011 was in the region of $100,000 or above. 38.The Husband in reply said over the years he had been relying upon his personal savings and also the net proceeds of sale of the former matrimonial home in 2006, the proceeds of sale of his securities investment and proceeds of sale of those remaining stock-in-trade of twisted-eggs to make up the monthly shortfall between income and expenses. This can be seen from his Form E filed on 4th October 2010 where his reduced monthly salary income from Kyle of $30,000 was not sufficient to cover his then monthly expenses of $45,724.83 (at Trial Bundle TB – 157 to 180). The Husband maintained his monthly income had never exceeded $50,000 in the past years. 39.In reply to those transactions revealed in the ABC bank account, the Husband in his oral testimony stated he had no idea of having that account. He claimed that he had lost his China Return Permit (回鄉咭) at one time and wondered whether the ABC bank account was opened by someone using his lost China Return Permit (回鄉咭). Although he said he had made a report to the Chinese Authorities about the lost of his China Return Permit (回鄉咭), no proof of such report was produced to this Court. He could say no more than that as to the existence of the ABC Bank account with his name as the account holder. 40.Counsel Mr. Wong for the Wife in his written Closing Submission invited the Court to draw inference of the Husband’s income by considering the Husband’s expenses level and the surrounding circumstances, namely, those numerous transactions adding up to large sum of moneys over the years in and out of the Husband’s personal bank account of which no satisfactory explanation could be provided. Had the Husband been telling the truth, why would those moneys allegedly belonging to Kyle or Kyle’s customers would have gone through the account of Kyle’s employee (namely, the Husband’s) personal bank account and not the company account of Kyle ? There is no reliable evidence, documentary or otherwise, to support the Husband’s explanation except his own bare allegation. Likewise, there is also no evidence to show his level of income since he set up his business activities of ritual attendant (similar to that of Kyle’s business after Kyle closed down) from 2011 until now is between $20,000 and $30,000. Again this is no more than his bare allegation. 41.Upon detailed consideration of the evidence available, I accept those bank transactions adding up to substantial sum of moneys in and out of the Husband’s personal bank account does attract scepticism which warrant full explanation by cogent evidence rather than by bare allegation. The Husband’s ‘explanation’, if I may so call it, is unbelievable and not being accepted. 42.With the benefit of legal advice and assistance, there is no challenge by the Husband as to the contents and authenticity of Exhibits “TKW-18” and “TKW-24” produced by the Wife, namely, the records of money transfer between the Wife’s younger brother and the Husband and the breakdown of entries of transactions of the ABC Bank account. The Husband had not arranged the younger brother of the Wife to give evidence to discredit the Wife’s case against him on Exhibit “TKW-18” and “TKW-24”. 43.Under cross examination in the morning of the last day of trial (that is, 23rd April 2014), the Husband agreed to Exhibit “TKW-24” was obtained by the Wife’s lawyers on the strength of a written authorisation to the ABC Bank signed by him. He deposed that the ABC Bank refused his request to cancel the account and get the money back. The reason given by the ABC Bank was that there was 1 digit difference in the numbers of his China Return Permit (回鄉咭) and the bank records of the same document. He further requested to get back the money in the account but was also refused for the reason that he did not possess the bank card. The Husband then explained to the Court that for replacement of the China Return Permit (回鄉咭), the last digit number would be increased by 1. 44.Question was then put by Counsel Mr. Wong to the Husband as to why he wanted to get the money back since he claimed the account was not his, he had no knowledge how this account came about, no operation of it and the money in there not belonged to him ? The Husband answered that he wanted to get the money back because he did not open the account and want to cancel it ! 45.Upon analysis, the Husband’s explanation as to the existence of the ABC Bank account is totally unbelievable and defies all common sense. If the ABC Bank account was opened by somebody who had picked his lost China Return Permit (回鄉咭), as the Husband so alleged or suspected, how would that person be able to sign a specimen signature same as the Husband’s signature in the authorisation letter which authorized the Bank to release the documents as per Exhibit “TKW-24” to the Wife’s lawyers ? There is no specimen signature anywhere in the China Return Permit (回鄉咭) which facilitate that person who had picked the lost China Return Permit (回鄉咭) the chance to try to forge the signature of the holder. Further, the Husband’s evidence that he wanted to get the money back also suggested that the account is, on balance of probabilities, his account. If he was not the account holder and had no idea of such account whatsoever, how could and why would he want to get the money out of the account which belongs to others ? 46.Accordingly, I find as a fact that the name of YYK (in the same Chinese characters as that of the Husband) recorded in Exhibit “TKW-18” is actually the Husband and not any other third party with the same name and family name. I also find whatever moneys standing in credit within the ABC Bank account, in the absence of any contrary evidence, belongs to the Husband. 47.For the above reasons, I find on balance of all probabilities that there are undisclosed monetary entries of bank transactions by the Husband. As rightly submitted by Counsel Mr. Wong, this is a case of material non disclosure of which adverse inference could readily be drawn to the Wife’s favour (see H v. W, K & B (HCMC No.8 of 2008) where Madam Justice Au-Yeung citing the judgment of Lam J (as he then was) at paragraphs 197 to 199 in L v. L (HCMC No.1 of 2003)). The standard of proof required to infer the existence and amount of assets which a spouse declines to reveal to the court should be the balance of probabilities (per paragraph 50 of her Ladyship’s judgment in H v. W, K & B, supra). 48.In the English case of NG v. SG [2012] 1 FLR 1211 where Mostyn J at paragraph 16 of the Judgment sets out a list of factors to be considered in circumstances where the court is satisfied that a party’s disclosure has been materially deficient. The factors are :-
49.The question which follows next is quantification, namely, what is the present level of income of the Husband and what is the likely amount of hidden funds or assets (see NG v. SG, supra). 50.Taking into account of all the evidence available, I accept the Wife’s case that the Husband’s disclosed income of $20,000 to $30,000 per month at present does not reflect his actual earnings. I do not accept the letter issued by Kyle dated 27/9/2010 (at Trial Bundle TB - 1470) as sufficient proof of his present income. Applying factors (c), (d) and (e) set out in the case of NG v. SG supra, I am entitled to draw adverse inference on the Husband’s present level of income by looking at historical monetary transactions. I find the Husband’s present income by adverse inference remain in the region of $50,000 per month. 51.As regards the likely amount of his assets, I find the moneys as revealed by Exhibit “TKW-18” in the currency of renminbi in credit in the Husband’s ABC Account of RMB 158,174,000 or, say, HK$1,898,088 to be the hidden assets. Issue (c) – Businesses owned fully and partly by Husband, income derived, share of net assets etc 52.I accept Counsel’s submission that since the Husband had not fully disclosed his assets, this issue could not be resolved or there being any further grounds upon which inference could be readily drawn upon. Issue (d) – Any other assets of the Husband; accuracy of his Form E 53.Likewise, I also agree with Counsel Mr. Wong that this issue could not be resolved or there being any further grounds upon which inference, adverse or otherwise, could readily be drawn upon by reason of the Husband’s material non disclosure as found by this Court. Issue (e) – Does the Husband have any beneficial interest in Property B ? 54.Counsel Mr. Wong fairly conceded that the only evidence of Husband having a beneficial interest in Property B is limited to the evidence of the Wife by way of her oral testimonies and affirmations. This Court is, however, invited to compare the credentials and evidence of the parties. 55.In my decision, the Wife is unable to come up with cogent and sufficient evidence to prove the Husband having a beneficial interest in Property B. The documents produced by the Husband’s brother on this issue do not support the Wife’s case either. Other Issues (a) The cash sum of $400,000 56.Apart from the Joint Statement of Issues, it is the Husband’s case that a cash sum of $400,000 was given by him to the Wife on 11th September 2006 out of the net proceeds of sale of the former matrimonial home. According to the records of hearing on the 3rd day of trial (that is, 24 October 2013) between 12:24 pm to 12:29 pm, Mr. So in his cross examination challenged the Wife of not having denied in any of her Affirmations after the Husband had deposed in his 1st Affirmation that he had given her such sum of money. The answer given by the Wife there and then was that it was impossible that the Husband had given her $400,000. She was only aware of this sum of $400,000 from these proceedings. Counsel Mr. Wong also objected the appropriateness of Mr. So’s question on 2 grounds. Firstly, there is the doctrine of implied joinder. Secondly, as a matter of law, silence cannot equate admission. 57.Mr. So further attempted to ask the Wife whether she would agree to having received such sum of $400,000. This question was immediately objected to by Counsel Mr. Wong relying upon the rule of ‘finality of answers’ to questions in cross examination. This objection was accepted by the Court. The Wife was not required to answer this further question. In such circumstances, I do not see how Mr. So could now said the following in his written Final Submission at paragraph 32 :-
58.The bank statement entry of withdrawal of $400,000 appeared at page 14 of Exhibit “YYK-2” (at Trial Bundle TB – page 1320) was recorded as ‘CW – Cash Withdrawal $400,000’. Considering the amount being substantial, why would the Husband have to withdraw cash notes and not simply issuing a cheque or bank draft to the Wife if he was minded or decided to give such sum to her ? According to the bank statement, he had a current account at that time. Alternatively, the Husband could instruct the lawyers handling the property conveyance to split $400,000 out of the net proceeds of sale of $787,856.67 to the Wife rather than him withdrawing cash notes from the bank and give to the Wife. It is noted that the net proceeds of sale of matrimonial home is $787,856.67 and in the form of a cheque deposit on 8 September 2006 (which is a Friday). The cash withdrawal of $400,000 was on 11 September 2006 (that is 2 days later, the following Monday) apparently after the cheque of $787,856.67 was cleared. I do not believe that the alleged withdrawal of $400,000 to the Wife was a decision formed over the weekend (that is, between the two days of 8th and 9th September 2006). There is also no evidence of there being any urgency for the Husband to have to withdraw cash notes to the Wife the following Monday soon after the cheque was cleared. There is no evidence or explanation from the Husband either save and except himself alleged having paid the sum of $400,000 to the Wife. Considering all the circumstances and on balance, I do not believe the Husband’s evidence that he had given $400,000 to the Wife. On the contrary, I find the Wife’s evidence credible. Apart from saying it was impossible for the Husband giving her $400,000, she also said if that was the case, the Husband would have transferred the money to her, the Wife then said she did not know why the Husband kept accusing her ! (我邊有可能收到佢40萬現金呀, 佢要俾佢都係過數俾我呀, 我完全都唔知lei個數目, 我都係依家先知道lei 40萬, 係咁冤枉我做咩野, 我都唔明 !) 59.I wish to add that since it is the Husband’s case that he had given $400,000 to the Wife, it is for him to prove by evidence on balance of probabilities the truth of it rather than, as what Mr. Eric C.K. So for the Husband attempted, to rely upon the Wife’s ‘non denial’ or any ‘implied admission’, so to speak. 60.For the reasons above, I find against the Husband. He had not given $400,000 to the Wife out of the net proceeds of sale of the former matrimonial home of $787,856.67. He had kept the entire proceeds of sale to himself. (b) The missing jewelleries 61.The other contention is that the Wife had, as revealed by her credit card statement with Aeon Credit Service (Asia) Co. Ltd (at Trial Bundle TB – page 72) spent $60,738 in the month of July 2010 for purchase of jewelleries which are luxuries but had not been accounted for in her evidence or their whereabouts disclosed (at Trial Bundle TB – pages 71 to 72). The Husband submitted that the Wife had incurred heavy debts and loans on purchase of other luxuries such as handbags of which debts were all repaid by the Husband. This had caused the Husband have to ‘control’ the Wife’s money spending by making those maintenance to the Wife indirectly through her father. 62.The Husband’s solicitor, Mr. Eric C.K. So, submitted a letter to this Court after the filing of his written Closing Submission to seek indulgence of the Court for replacement of paragraph 29 of his written Closing Submission. This letter was copied to the Wife’s solicitors. The gist of the replacement is to question the Wife how could she afford to buy jewelleries of $60,738 in July 2010 when allegedly she was only having a monthly income of $6,340 ? 63.It is obvious the jewelleries were purchased and paid by way of the credit card of the Wife, namely, with Aeon Credit Service (Asia) Co. Ltd. The Wife explained those spending happened after she had taken medication for her psychiatric illness. Those spending had not been repeated. There was an entry of debt and liabilities at Item 2.13 of the Wife’s Form E owing to the same credit card company a sum of $66,487.02 (as at 16/9/2010). The amount spent and the time of spending in the jewelleries purchase matched with each other. The Husband’s queries had been fully answered. 64.Regarding the whereabouts of the jewelleries purchased in July 2010, it is noted that at Item 2.10 of the Wife’s Form E dated 30 September 2010, there was 1 pair of diamond ear ring worth $30,000 but pawned for $20,000. The Wife’s evidence is that the Husband stopped paying her maintenance since July 2010. She had to borrow money from friends and utilize funds obtained through credit card to maintain a living (see Item 5.1 of her Form E). Accordingly and on balance of probabilities, I find for the Wife that the jewelleries purchased were sold for her living expenses. I noted the difference in amount as to the diamond ear ring and the amount of the jewelleries purchase. Bearing in mind the Wife’s explanation for the purchase was because of medication she took, I am prepared to accept there might possibly be some other jewelleries which the Wife had disposed of but not being able to recall with precision and state in her Form E. (c) Any maintenance payment to the Wife ? 65.Under cross examination, the Wife disagreed the Husband had paid her maintenance through her father since July 2010. She maintained that before the separation the Husband would pay maintenance of $15,000 per month directly to her. 66.The Wife’s father in his testimony adopted the contents of his Affirmation as evidence in chief. Under cross examination, he denied having any knowledge about the Husband making payments into his bank account between the years 2008 and 2010. He himself had not retrieved any single dollar from the sum of $817,420 deposited by the Husband. Upon recollection, between the years 2008 and 2010 he had, and still has, a bank account with HSBC and a bank card through which withdrawals can be made in Hong Kong or Mainland China. Since the Wife’s younger brother (that is, his younger son) worked for the Husband during those years and would be receiving salary, the younger son had asked for the bank card in order for him to receive his salary from the Husband, whether in Hong Kong or Mainland China. This part of his testimony had not been discredited by Mr. Eric C.K. So through cross examination. Upon Re-examination, he deposed the Husband had not told him before or after the divorce that money had been deposited into his bank account for his use and also for his daughter (that is, the Wife). Such evidence supports the case that the Husband deposited moneys into the Wife’s father was for payment to the Wife’s younger brother. Given careful consideration and assessment of his testimonies, I find him credible and accept his evidence more probable than not to be the truth of the case. 67.On this issue, I find the Husband had not paid maintenance to the Wife through the Wife’s father’s bank account as he so alleged. (d) Disclosure of HSBC bank account and BOC securities account 68.The next contention of the Husband is that the Wife had not disclosed that she possessed a bank account with HSBC and also a securities account with the Bank of China (“BOC”). There was a credit balance of $132,306.74 as at 8th December 2007 with the HSBC bank account which went unexplained. There was a credit balance of $683 as at 18th April 2008 with the securities account of Bank of China which also went unexplained. 69.The contention of $600,000 held by the Wife had been found to be moneys held on trust for her father for stock investment. Thus, the securities account at Bank of China where those investments for the father were made had not been disclosed would not have any significant ramifications upon the parties’ respective claims against each other. The credit balance of $683 would not fall into the pool of family assets for distribution. 70.As can be seen in the Wife’s bank statement with HSBC which the Husband produced as his Exhibit “YYK-1” (at Trial Bundle TB – page 1302), the credit balance of $132,306.74 was placed under the description of ‘Total Balance in Investment Services’ of an earlier entry of $132,051.90. Accordingly and likewise, such credit balance also would not form part of the pool of family assets for distribution. The Parties’ Form Es 71.Both parties filed their Form Es back in October 2010. They were given the time and chance to update their latest financial situation and expenses by oral testimonies during trial. (a)The Wife’s present expenses 72.At paragraph 4 of the Wife’s 4th Affirmation filed on 17/2/2012 (at Trial Bundle TB – page 106), she deposed as follows :
73.During cross examination by Mr. So, the Wife updated paragraph 4 of her 4th Affirmation on the monthly expenses as follows :-
74.Further, during cross examination, the Wife was referred to paragraph 6 of her 4th Affirmation on the items there under and testified that the latest figures should be as follows :-
75.The Wife is a psychiatric patient and is not able to find or hold a job. She is financially depending upon the maintenance pending suit of $5,000 per month from the Husband and a monthly disability allowance of $1,540 from the Government. However, due to the Legal Aid First Charge, $200 was deducted from the $5,000 maintenance pending suit so she is only receiving $6,340 (that is, $5,000 - $200 + $1,540) a month. The Wife has no other source of income. 76.According to the bank records and statements produced, the Wife has no major financial assets save and except two insurance policies with Manulife (at Item 2.8 of Form E), one of which attached with a policy loan. The net total value as at May 2010 was around $3,580.57. (b)The Husband’s present position 77.During his evidence in chief, the Husband was referred to his Form E and provided the updates, adopting the item numbers of the Form E, as follows :-
78.The total amount of Husband’s monthly expenses is about $25,720 per month (including the child’s expenses). Identification of Assets 79.Counsel Mr. Wong for the Wife invited this Court to view the case in a broad brush approach. 80.Given the fact that the progress of this case at the pre-trial stage has been prolonged by the discovery process, the 6-day trial proper stretched over a year and the Court’s finding of hidden assets of the Husband in respect of which the quantity and exact amount could only be determined by adverse inference, I am prepared to consider Mr. Wong’s submission whilst applying the established principles laid down in the leading case of LKW v. DD (supra) and considering the section 7 factors. I have reminded myself that in any event the ultimate aim is to achieve fairness to the parties. 81.As found by this Court, the Husband’s undisclosed assets are $1,898,088 (see paragraph 51 above). The disclosed assets at trial added up to $31,410 (see paragraph 77 above). In addition, there are the net proceeds of sale of the former matrimonial home which the Husband confirmed at paragraph 7 of his 1st Affirmation (at page 14 of Exhibit “YYK-2” at Trial Bundle TB – page 1320) was $787,856.67. 82.The alleged indebtedness of $400,000 by the Husband to his elder brother was not supported by evidence both as to the existence and the cause of it. This amount would not be considered in the computation process. 83.The Husband also possessed one insurance policy of which no updated value was produced at trial. The Wife’s two insurance policies were valued at $3,580.57 in her Form E back in May 2010 (one of which attached with a loan) of which also no updated value was produced at trial. In the absence of documentary evidence, I decided not to put into the computation process the values of both parties’ respective insurance policies. 84.The Wife has no assets and was so found by the Court. The Wife’s indebtedness to Aeon Credit Service (Asia) Co. Ltd. would be excluded from the computation process for two reasons. First, such indebtedness was accepted and found by the Court to have arisen from purchase of jewelleries of which the Wife had utilised for her living expenses due to lack of maintenance from the Husband. To take into account such liabilities when computing the total pool of matrimonial assets may pose unfairness to the Husband since the lack of maintenance would have to be considered under those section 7 factors, such as ‘conduct of the parties’, ‘responsibilities’ or ‘contributions’ etc. Secondly, there is also no updated documentary evidence as to the latest amount of this indebtedness at trial. 85.The total capital assets (both disclosed and undisclosed) of the Husband is therefore $2,717,354.67 (that is $1,898,088 + $31,410 + $787,856.67) or, say, round up to $2,718,000 for easy calculation. 86.In my decision, this is also the total amount of family assets since the Wife has no capital assets. Assessing the parties’ financial needs 87.The next step is for the Court to assess the parties’ financial needs. Income, earning capacity, property and other financial resources 88.As found by this Court, the Husband’s present level of income remain in the region of $50,000 a month (see paragraph 50 above). On all the evidence considered objectively, the Husband is believed and so found by the Court to possess high earning capacity. Over the years he has been able to handle and manage business activities of unrelated nature both inshore and offshore, namely, Hong Kong and Macau. He has been the sole bread winner since marriage. There are no debts incurred notwithstanding that he claimed not being able to make ends meet each month without recourse to his savings. His alleged indebtedness of $400,000 to his elder brother had not been accepted by this Court. 89.Again as found by this Court, the Husband possessed capital assets which he had not fully disclosed. Taking into consideration the amount and frequency of monetary transactions and turnover in his bank accounts and his ‘explanation’, it is probable that the amount of assets so found and determined by adverse inference might be just ‘the tip of an iceberg’. 90.The Wife has no earning income. She has been a housewife and depended entirely on the Husband financially. At present, she has no earning capacity and living upon the Husband’s maintenance pending suit of $5,000 per month (undertook by the Husband and embodied in an Order of this Court in October 2010). She is also receiving a disability allowance of $1,540 each month. Financial needs, obligations and responsibilities etc 91.The child of the family whose custody, care and control rests with the Husband. It is agreed that the child is suffering from Attention Deficit Hyperactivity Disorder (過度活躍症) (“ADHD”). At present, the child is at the age of 15. No evidence was adduced by the Husband as to any extra financial needs of the child for the ADHD except those usual monthly expenditure items in the Form E. The Husband has no physical or health problems requiring extra financial needs. 92.On the other hand, the financial needs of the Wife are wanting, both in terms of her mental health treatment and usual monthly expenditures. 93.In the medical report by Dr. Benjamin Lai (specialist in psychiatry) dated 6 October 2010 (at Trial Bundle – page 1776), the Wife was diagnosed suffering from depressive illness associated with anxiety, obsessional symptoms, and suicidal behaviour and require medical treatment. She was also found to be under stress of relationship problem with her Husband. In another Psychiatric Report by Dr. Lee Hou Tao, Louis, of Department of Psychiatry, NTEC dated 16 November 2010 (at Trial Bundle TB – page 1779), it was recommended that she should continue with her psychiatric follow-up. In a further medical report by Dr. K.L. Wong of Castle Peak Hospital dated 30 December 2011, she was also diagnosed to have Bipolar Affective Disorder. Her condition had been fluctuating and was given mood-stabilizing agent, antipsychotic, anxiolytic and hypnotics. Further follow up session was also arranged for her. 94.In the latest medical report by Dr. Greg Mak of Castle Peak Hospital dated 12 July 2013, of which I recite the following important passages :-
95.It is thus plain and obvious that there are financial needs of the Wife both immediate and in the foreseeable future which the Court has to consider when deciding her financial claims. Standard of living before breakdown of marriage 96.As deposed by the Wife of which the Husband took no issue, the parties lived in a private residential flat in Shatin of an area around 700 sq. ft with clubhouse facilities. There was the service of a foreign domestic helper. There were 2 trips of travelling to South East Asia countries each year. The standard of living is moderately good and above average. Age of each party and duration of marriage 97.At present, the Husband is aged 45 (born in 1970). The Wife is aged 41 (born in 1974). As at the date of the Decree Nisi in October 2010, the marriage had lasted for about 13 years. This can be said to be within the spectrum of long marriage. Physical or Mental disability of either of the parties 98.As said, only the Wife has mental disability. The Husband is both physically and mentally sound. Contribution made by each parties to the welfare of the family 99.After marriage, the Wife has been a full time housewife and mother looking after the child of the family. The Husband was the sole bread winner. 100.In my decision, the contribution of the parties to the welfare of the family was about the same. Compensation 101.The parties have no dispute on this factor. Applying the sharing principle 102.The pool of family assets as found by this Court are readily sufficient to go beyond to meet both parties’ financial needs. Generally, the Court will decide that the sharing principle applies to the total assets, so that they should be divided equally between the parties unless there are good reasons for departing from the principle of equal division (see LKW v. DD, supra). 103.In my decision, the principle of equal division will also be applied to this case subject to departure as hereinafter stated. Consideration of any good reasons for departing from equal division 104.The proper question to be asked is whether there are good and articulated reasons for departing from the ‘yardstick of equal division’ (see LKW v. DD, supra) ? 105.On the facts of this case, I am inclined to provide a 10% departure from equal division in favour of the Wife. The reasons for such departure are as follows :-
106.I wish to add that the Court has already taken into full account and consideration of the Husband having to take care of and financially support the child of the family solely who is suffering from ADHD when arriving at such percentage of departure from equal division. Deciding the Outcome 107.Considering all the factual circumstances and the evidence, I find this is not a suitable case for a ‘clean break’ for the parties when deciding the Wife’s ancillary relief claims. In my decision, justice and fairness dictate a lump sum award and a periodical payment order to be granted for the Wife’s ancillary relief claims. 108.Applying the 60:40 ratio upon the total amount of family assets found by this Court, the Wife’s share of 60% is $1,627,200 (that is, $2,712,000 x 60%) which will be the lump sum award. 109.Since the entirety of the family assets found by this Court is in the possession of the Husband, the lump sum award of $1,627,200 will have to be paid to the Wife (subject to Legal Aid First Charge) by the Husband. Such payment to be made within 14 days from the date of the decree nisi granted on 6 October 2010 being made absolute. It has been noted by the Court that the Wife in her Open Proposals had accepted lump sum to be payable by instalments. However, in my decision, any lump sum by instalments order would have to be decided upon application by the Husband, if any in due course. There is no basis of making any lump sum by instalments order. 110.Since the Wife is the Respondent against whom the decree nisi was granted, I direct the Wife’s solicitors to file the appropriate application under Rule 65 (4) of the Matrimonial Causes Rules, Cap.179A, for the decree nisi to be made absolute. 111.For periodical payments, the Husband’s present income as found by the Court in the region of $50,000 a month. The total expenses for the Husband and the child add up to around $25,720 a month (see paragraph 78 above). There is a surplus of, say, around $24,280 a month (that is, $50,000 - $25,720). 112.The Wife’s present expenses are around $14,200 per month (see paragraph 74 above). 113.This Court accepts the amount of monthly expenses claimed by the parties. For easy calculation, the Husband’s monthly expenses would be rounded up to $26,000 and that of the Wife’s would be rounded up to $15,000. 114.In view of the fact that there would be a surplus from the Husband’s income of around $24,000 a month, I also order that there be monthly periodical payments of $15,000 (subject to Legal Aid First Charge) by the Husband to the Wife commencing 1 February 2015 until re-marriage of the Wife or the joint lives of the parties, whichever is the shorter. Having made such payment, the Husband would still be left with a surplus of around $9,000 a month. 115.I have considered the Wife’s Open Proposals of the periodical payments to take into account the maintenance pending suit and whatever amount of difference to be back dated to July 2010 (that is, over 4 years ago). I do not consider such mode of calculation is fair since the monthly expenses at present may differ from 4 years ago. I believed the departure of 10% from equal sharing would have sufficiently compensated for whatever deficit the Wife is entitled to in terms of her periodical payments since July 2010. Maintenance for the Child of the family 116.In light of the financial situation and health condition of the Wife, the Husband would have to continue solely maintaining the child of the family. In any event, there is no cross application by the Husband for contribution to the child’s maintenance although any such application at this stage would be futile. Costs 117.Taking into account the outcome of this case and the latest Open Proposals of the Husband, the normal rule as to costs should apply. Thus I order the Husband to pay all the costs of the Wife’s ancillary relief claims, including all costs reserved, to be taxed if not agreed on party and party basis. 118.I also order the basis of the costs order dated 23 October 2013 to be on party and party basis, to be taxed if not agreed. 119.I also grant Certificate for Counsel for the ancillary reliefs trial and for the Costs Order dated 23 October 2013. Orders 120.I now make the following orders and directions on the Wife’s ancillary reliefs claim :
121.This costs order nisi will become absolute unless any party apply to vary the same within 14 days from the date of this Judgment. Section 18 declaration 122.I also grant a declaration under Section 18(1)(b)(i) of the Matrimonial Proceedings and Property Ordinance, Cap.192. 123.Last but not least, I wish to express my gratitude to both parties’ legal representatives for their assistance in this case.
Mr Eric C.K. So of Messrs. Ivan Tang & Co., Solicitors for the Petitioner Mr Timothy Y.H. Wong instructed by Messrs. Liu, Choi & Chan on the instructions of the Director of Legal Aid, Solicitors for the Respondent |
Cases cited in this judgment
Further hearings and rulings under FCMC 5141/2010