柯 v. 龔

FCMC 12807 / 2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 12807 OF 2013

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J U D G M E N T
(Ancillary Reliefs)

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Foreword

1.  This is an unusual and exceptional case.  There are just too many oddities which I find worth to mention in this Judgment.

2.  In this case, the Petitioner was the Wife (“Wife”) and the Respondent was the Husband (“Husband”). This is the trial of the Wife’s claim against the Husband for ancillary reliefs. However, the Wife’s case as presented in her claims and pursued throughout the trial, was somehow unusual.     

3.  At the commencement of the divorce suit, she prayed for the return of 2 catties of gold or the money value thereof as at September 2004 and nominal maintenance (as stated in her Amended Petition), then confined to nominal maintenance only (as stated in her Counsel’s Opening Submissions), then changed to seek the return of 1½ catties of gold (during cross examination) and then to a lump sum of HK$130,000 (at her Counsel’s Open Proposals and at Closing Submissions).

4.  As early as 2011, the Wife commenced her divorce proceedings under FCMC No. 4042 of 2011 (“1^st Petition”) relying upon the fact of “Unreasonable Behaviour”.   It then moved on to FCMC No.1136 of 2012 (“2^nd Petition”) relying upon the fact of “1 YearSeparation and Consent” and finally these proceedings (“3^rd Petition”) relying upon the fact of “2 Years Separation”. 

5.  There are 2 Decisions handed down by this Court earlier in these proceedings on 24 December 2014 (“1^st Decision”) and on 15 June 2015 (“2^nd Decision”). 

6.  It is worth mentioning that the Wife was legally represented by the same law firm Messrs Yem & Associates (“YA”) since 2011 on legal aid in the 1^st Petition, 2^nd Petition and the present 3^rd Petition up until 12 March 2015 when legal aid was discharged.   Thereafter the same firm YA continued to represent the Wife.  The Wife also engaged Counsel Miss Crystal Lai for this 5-day trial without the provision of legal aid although she has been a recipient of Comprehensive Social Security Assistance (“CSSA”) throughout these years.

7.  The Husband is also receiving CSSA under his mother’s name since March 2012 and throughout these years up to present.  The Husband was adjudicated a bankrupt back in November 2008 and his bankruptcy was only discharged around the end of 2012.  The Husband is legally represented by Messrs. Lennon & Lawyers throughout these years on the instructions of Director of Legal Aid on the 3 sets of divorce proceedings one after the other since 2011.    

8.  It is also worth mentioning it is unusual, not only for a CSSA recipient without the provision of legal aid but nevertheless financially capable of having private legal representation for a 5-day trial with Counsel engaged.   Given the fact that this is a trial on ancillary reliefs, there might be an issue on costs after the trial whereas the Husband was all along continually legally aided.   As I see it, this is not just a matter of whether the Wife had the moneys to pay her own lawyers’ fees. 

9.  Upon enquiry by this Court, it was said by Counsel Miss Lai that her instructing solicitors was providing “pro bono” legal services to the Wife.  There was then produced before this Court a Memorandum (豁免律師費) in Chinese under the notepaper of the law firm YA countersigned by the Wife dated 9 July 2014 where YA stated they would “fully waive” their legal fees save and except disbursements, in Chinese characters : “除墊支費外, 本所將會全部豁免收取閣下的律師費 (costs)”.  Since Counsel fees are an item of disbursements, it appears not being embraced under the so-called ‘waiver’.  The Memorandum was attached to a covering letter from YA dated 7 December 2015 stating that the “pro bono” services had already started from the date of the Memorandum, which is prior to the discharge of the Wife’s legal aid certificate in March 2015.   It also stated that the original Memorandum had already been sent to the Legal Aid Department for their safe-keeping.

10.  Suffice to say this is what was noted.  Had the Legal Aid Department been duly provided with the Memorandum as YA said so in their letter to the Court, I leave it to the Legal Aid Department to consider the appropriateness of maintaining a legal aid certificate in a piece of on-going litigation as the present one.  The issue of common fund costs always exists to the Court and the other party in litigation on the strength of such legal aid certificate whilst the actual scenario behind is that no such common fund costs would be claimed by the assigned solicitor. This is peculiar.

11.  I have some observation on the contents of the Memorandum. It referred to the law firm YA not claiming any interests over the proceeds of litigation whether eventually such proceeds were recovered through settlement or adjudication by the Court.  The question is, could the assigned lawyers claim any interests over the fruits of litigation of a legally aided client ?  In a legally aided case, any right to claim interests over the fruits of litigation rests with the Legal Aid Department under the First Charge regime rather than the assigned solicitors.  How could the assigned solicitors said so to the aided person in defiance to the First Charge between the aided person and the Legal Aid Department ?  Moreover, the aided person might be prompted if not being persuaded to continue a piece of litigation totally undeterred and without consideration of any risks over party and party costs at the end of the case.  In any event, I also leave it to the Law Society to consider whether there is any issue as to fiduciary duties or conflicts under the code of professional conduct for a law firm assigned by the Legal Aid Department to set up a so-called “waiver of fees” arrangement with the legally aided client assigned to them when the aided person already has had his or her costs secured by the legal aid certificate.

Background of the 3 sets of divorce proceedings

12.  The parties were married in September 2003 in Mainland China.  There is one child of the family born in June 2005, a girl, who is at the age of 11 at the time of trial.

13.  On 30 March 2011, the 1^st Petition (Unreasonable Behaviour) was filed.

14.  By an Order dated 4 October 2011 made in the 1^st Petition, the learned Deputy Judge Yim granted leave for the filing of a fresh Petition on “1 Year Separation and Consent”.

15.  The 2^nd Petition (“1 Year Separation and Consent”) was issued on 2 February 2012.

16.  By an Order dated 9 November 2012 made in the 2^nd Petition, the learned Deputy Judge Yim granted leave to the Wife to withdraw the 2^nd Petition.

17.  By an Order dated 7 November 2011 made in the 1^st Petition, the learned Deputy Judge Yim granted the custody, care and control of the child to the Wife with defined access to the Husband. 

18.  By an Order dated 11 April 2013 made in the 1^st Petition, the learned Deputy Judge granted leave for the filing of a fresh Petition on “2 Years Separation” and that the 1^st Petition be dismissed upon decree nisi being granted in the fresh Petition to be issued.  It was also directed by the learned Judge that ancillary reliefs be transferred to the fresh Petition to be issued.

19.  On 25 July 2014, Decree Nisi was granted in the 3^rd Petition.  Pursuant to the said Order dated 11 April 2013, the 1^st Petition was dismissed.  On 14 November 2014, this Court made a further order in the 3^rd Petition by consent that the child’s custody, care and control be to the Wife with defined access to the Father.  Thus, the only remaining issue is that of ancillary reliefs.

Background of the parties

20.  At the commencement of trial, the Husband was aged 53 and unemployed.  In his latest Form E, he reported has been unemployed since 2001.  He has no financial means or income whatsoever and is relying upon the comprehensive social security assistance under his mother’s account since March 2012.  He has no debts and his bankruptcy was discharged around the end of 2012.  The reported monthly expenses at Part 4.1 were HK$5,450.

21.  The Wife was aged 44 and a full time housewife.  In her latest Form E, she reported she was receiving comprehensive social security assistance of HK$6,050.20 a month for herself and the child of the family.  She reported no assets or debts.  She reported of having a meagre savings of HK$155.79 in his savings account with the Bank of East Asia.  The reported monthly expenses at Part 4.1 were HK$5,700 and the child’s expenses at Part 4.3 were HK$300.   Total monthly expenses were HK$6,000.

The Wife’s latest Open Proposals

22.  On the 1^st day of trial, the Wife through her Counsel confirmed in writing that she would no longer pursue on nominal maintenance as earlier claimed and would propose as follows :

“(a) The Husband do pay a lump sum of HK$130,000 to theWife as a clean break within a time to be agreed byboth parties;

    (b)  No Order as to costs as to the present proceedings.”

The Husband’s latest Open Proposals

23.  On the 1^st day of trial, the Husband proposed as follows :

“The Husband agrees to pay nominal maintenance of HK$1.00 per year to the Wife.”

The Law on Ancillary Relief

24.  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:

“4. Financial provision for party to a marriage in cases of divorce, etc.

(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of section 25(1), make any one or more of the following orders, that is to say-

(a) an order that either party to the marriage shall make to the other such periodical payments and for such term as may be specified in the order;

(b) an order that either party to the marriage shall secure to the other to the satisfaction of the court, suchperiodical payments and for such term as may be so specified;

(c)  an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified.

(2) Without prejudice to the generality of subsection (1)(c), an order under this section that a party to a marriage shall pay a lump sum to the other party-

(a) may be made for the purpose of enabling that other party to  meet any liabilities or expenses reasonably incurred by him or her in maintaining himself or herself or any child of the family before making an application for an order under this section;

(b) may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court.“

25.  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:

(1)  It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

26.  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:

a.   The first is that the implicit objective of a section 7 exercise is to arrive at a distribution of assets which is fair as between the parties[2];

b.   The second is that the concept of fairness requires the refutation of any gender or role discrimination[3];

c.   The third principle is that, with a view to eliminating insidious discrimination and promoting fairness, judges should check their tentative views on distribution against a “yardstick of equal division” which should be departed from only for good, articulated reasons[4];

d.   The fourth principle is that the court should not countenance any attempt to engage in costly and often futile retrospective investigations of the failed marriage which tend to deplete the parties’ (and the courts’) resources and to increase antagonism and discourage settlement[5]. 

27.  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:

a.   The first step in the exercise is to ascertain the financial resources of each of the parties calculated as at the date of the hearing[6];

b.   The next step is for the court to assess the parties’ financial needs[7];

c.   If surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the court to apply the sharing principle to the parties’ total assets, leaving the “needs” question previously considered to be dealt with under that principle[8];

d.   The fourth step therefore involves considering whether good reasons exist for departing from the principle of equal division[9];

e.   When deciding the outcome, the court is not bound to depart from equality in the division of the parties’ assets even if one or more of the factors considered are engaged on the facts.  The weight to be given to such considerations is a matter of discretion for the court[10]

The Wife’s Case

28.  To start with, the Wife in her 3^rd Petition (as amended) sought the financial reliefs, written in simplified Chinese characters as follows  :-

“(a) 财產转让令

呈请人的金器首饰重两斤在2004年9月交答辩人代管共重两斤：-

壹斤半金 - 金首饰是呈请人之妈妈给与的嫁妆-

(1) 三对金龙凤手鐲，

(2) 一对金手鐲，

(3) 三条金手炼，

(4) 金脚炼一条，

(5) 金戒指十一只，

(6) 金颈炼8条，

(7) 金耳环一对

半斤金 - 金首鉓是答辩人之妈妈即奶奶送赠与呈请人：-

(i) 一对金龙凤手鐲，

(ii) 一对金手鐲，

(iii) 金脚炼一条，

(iv) 金戒指四只，

(v) 金颈炼两条，

(vi) K金颈炼一条，

(vii) 金耳环一对；

或一笔款项相等于上述全部金饰在2004年9月时金价之总值。

(b)  呈请人赡养费每年港币$1.00。”

29.  Oddly enough, no financial reliefs were claimed or had ever been claimed by the Wife for the child of the family whose custody, care and control was granted to her.  Although the terms of reliefs stated in the Amended 3^rd Petition appeared to be seeking a property transfer order (財產轉讓令) or a sum of money representing the value as in September 2004, the Wife’s case as put before the Court at trial, as I see it, in essence was asking the Husband to pay her a lump sum of HK$130,000 without any evidence to substantiate how such HK$130,000 was arrived at, if not an arbitrary figure. Surprisingly, most of the evidence in chief so led by her Counsel Miss Lai focused upon the issue of the 2 catties of gold and not anything further down the line.  There was no evidence in substance led upon the so-called “needs” case for the Wife or for the child in the future save and except a brief ‘go-through’ the latest Form E on expenditure items.  The whole trial on ancillary reliefs took the form more or less akin to, say for instance, a civil claim on recovery of money had and received or recovery of debt due and owing, so to speak.  In any event, I was not assisted by Counsel Miss Lai in her submissions as to why such an approach was adopted for the trial of the Wife’s and the child’s ancillary reliefs.

30.  Counsel Miss Lai in her submissions referred heavily to the Husband having failed to comply with an Order granted by the learned Deputy Judge Yim dated 23 February 2012 in the 2^nd Petition for disclosure of bank statements from January 2004 to December 2008, details of stocks and securities, details of the landed property at Amoy Garden and details of his bankruptcy and also his reasons for not able to find employment.  Such bank statements are crucial for tracing the net proceeds of sale of a landed property at Amoy Garden which was sold in 2008 before his bankruptcy.  The Court was asked to draw adverse inference against the Husband for such conduct of non-disclosure.

31.  There was also reference to the Husband’s answers in cross examination being evasive and giving improbable answers as to the proceeds of sale of the landed property at Amoy Garden. Counsel Miss Lai even went further to submit that for the fact of the Husband’s failure to comply with the Order for discovery without satisfactory explanation, it is highly suspicious that the Husband might have concealed his assets from the reach of both the Wife and also the Trustee-in-bankruptcy during his bankruptcy period (§41 and 42 of Miss Lai’s written closing submissions). Again, adverse inference against the Husband is called for.

32.  Reference was made to the Husband’s securities investments and bank accounts balances which he had failed to disclose as per the said Order of Deputy Judge Yim.  This posed the question as to where the pre-bankruptcy assets lay ?  Again, adverse inference should be drawn against the Husband (§43 of Miss Lai’s written closing submissions).

33.  Moreover, it was submitted that the Husband during cross examination said he was having a monthly expenditures of ‘ten-odd thousand dollars’ and, when being further put to him the amount of CSSA each month was only $5,000 odd dollars, the Husband then tried to explain away his answer by claiming that his answer included his mother’s anticipated expenditures for staying in an elderly home in future. The explanation smacks of a concoction and more likely indicates that the Husband had alternative source of income/assets which were throughout concealed from the Wife and the Court (§45 of Miss Lai’s written closing submissions).  

34.  Thus the Court should draw adverse inferences against the Husband on his financial position and concealment of assets (§46 of Miss Lai’s written closing submissions).  

35.  Finally, the Husband took no issue on the Wife’s evidence of her overall financial needs exceeded the amount of the CSSA she received each month to the effect that she had to borrow from friends and relatives to make ends meet.  The Wife had also worked briefly in October 2015 as a waste collector earning in total HK$5,036. The Wife being an unsophisticated and simple woman from Mainland China, can hardly be compared with the Husband in respect of their earning capacities (§47 and 48 of Miss Lai’s written closing submissions).

The Husband’s Case

36.  The Husband’s case and argument is simple and straightforward.

37.  First, he had been unemployed since 2001 and had no means to meet any ancillary reliefs claimed by the Wife.  He was adjudged bankrupt on 30 December 2008.  Ever since March 2012 and the discharge of bankruptcy, he has been relying on his mother’s comprehensive social security assistance of HK$5,521 a month which could barely cover his monthly expenses with his elderly mother.  The Husband and his mother, who is over 80 years of age, together live in a public housing unit where his mother is the registered tenant. 

38.  The Husband himself had been suffering from inborn decapitated eye.  Nonetheless, he had to look after his elderly mother.   Prior to his unemployment in 2001, he had worked for the American Express Bank between 1990 and 2001 as an analyst.  There is no strong disagreement as to the Wife’s earning capacity comparatively lower than him.

39.  The Husband agreed that the Wife had placed certain quantity of gold around 10 taels only with his mother for safe custody.  However, between 2006 and 2007, about 95% of those 10 taels of gold were returned to the Wife on 3 separate occasions upon her requests. The remaining 5% of gold was admittedly sold by him to cover monthly expenses prior to his bankruptcy in December 2008.  The Husband strongly disputed the quantity of gold to be 1½ catties.

40.  The Husband also denied concealment of any assets or pre-bankruptcy assets including the proceeds of sale of the landed property in Amoy Garden so asserted by the Wife.   His explanation for non production of the bank statements at the beginning was that the costs for obtaining the same was out of his reach and need to first obtain legal aid approval.  Moreover, the Husband’s Trustee-in-bankruptcy would have those information when he was adjudged bankrupt in December 2008.

The Court’s Views

41.  Both parties have not called any witnesses and simply relied upon their own testimonies and documents.

42.  To start with, given the dire financial situation of the parties as shown in their respective Form Es, there is no room for consideration of any sharing principle in this case. Unless there is evidence to support the Wife’s assertion that there are hidden assets or sufficient evidence for the Court to draw adverse inference against the Husband on his finances, there is also no room for this Court to make monetary orders to cover the needs of the Wife and/or the child given the fact that the Husband is also unemployed at present and also a CSSA recipient.

43.  The Wife’s claims are somewhat unclear.  This Court raised a few queries with her Counsel Miss Lai on the 4^th day of trial.  First, whether the Wife is now seeking a lump sum or simply recovery of the value of the 1½ catties of gold.  In the Amended 3^rd Petition, the Wife sought 2 catties instead of 1½ catties of gold.  During cross examination on the 3^rd day of trial, she changed to claim only for what her mother had given her, that is, the 1½ catties of gold and not the other ½ catties of gold given by the Husband’s mother. Secondly, if the Wife is saying that the value of the gold represented family assets, would the Wife be conceding that a certain percentage or share of it should go to the Husband based upon the principle of sharing in the family law context.  She appeared to be seeking the full amount of the gold to be given to her although there is no evidence both as to the quantity and the value, whether in September 2004 or at present, of the gold in question.  The only evidence available is the words of mouth of the Wife herself.

44.  There was no satisfactory answer to the Court’s queries save that the Wife was claiming what was given to her by her mother as wedding gifts (嫁粧).  The basis of claim was worsened further since the Wife’s evidence was that the gold ornaments were being handed over for safe custody and that she was simply asking for their return, somehow akin to the situation of a tortuous claim of reversion in civil cases.   It is unfortunate for such bizarre claims to have happened upon legally represented party. 

45.  To take the first step propounded by the House of Lords in the case of LKW v. DD (supra) on identification of assets, there is insufficient evidence for making any findings of fact that there were identifiable family assets available at the time of this trial.  The Wife’s assertion of concealed assets was based upon the Husband’s non compliance with the disclosure order granted by Deputy Judge Yim back in 2012.  In my view, and without negating the terms of the said Order, the unavailability of the bank statements from 2004 to 2008 had been overtaken by event, namely, the Bankruptcy Order dated 30 December 2008.  Having said, there is no basis for drawing adverse inference against the Husband who had been adjudged bankrupt that the he had concealed assets.  Any such contention would have to be more appropriately brought before the Bankruptcy Court to consider whether the bankruptcy order should be granted.   Had I been wrong on such finding, there is still no sufficient evidence to find the Husband having had hidden the alleged 1½ catties of gold or such other quantity of gold worth HK$130,000 based upon the Wife’s bare assertion.

46.  The fact that the Husband’s oral testimonies in court as to his present monthly expenses and the amount of CSSA received being inconsistent with each other would not be sufficient to supporting a finding of fact that the Husband does possess the lot of 1½ catties of gold claimed by the Wife or that he had HK$130,000 to satisfy the Wife’s claims.  The two does not tie hand in hand.  The Wife has not been able to come up with solid and cogent evidence save and except her own assertion and a photograph of herself wearing gold ornaments at the time of wedding.  Moreover, there is no single piece of documentary proof of any piece of the alleged gold ornaments, whether on their size, weight and values. 

47.  Drawing adverse inference upon non compliance of Court Orders to substantiate a finding of fact that family assets exist for meeting ancillary reliefs claims is overreaching and over simplistic.  I find the Wife’s claim unsubstantiated by evidence.  All in all, the Wife’s evidence is based upon postulation and assertion lacking substantiality.

48.  For all these reasons, I find there are no assets available for this Court to make any money orders at this stage in terms of ancillary reliefs.

Any Nominal Maintenance ?

49.  Counsel for the Wife challenged the Husband’s unemployment at present is dubious by reference to his age and earning capacity.

50.  The Husband’s capability of performing the task of an analyst for some 10 odd years between 1990 and 2001 for the American Express Bank readily speak for itself.  Moreover, prior to his bankruptcy, he had been able to accumulate wealth and purchased the Amoy Garden property is another example of his earning capacity higher than the Wife. 

51.  I accept that the Husband’s unemployment or inability to secure work for over 10 years since 2001 is highly suspicious, if not self serving.  During cross examination, the Husband admitted that he only have had 2 job interviews since unemployment and both turned out to be unsuccessful.

52.  Given careful consideration, I agree with Counsel Miss Lai that the Husband possesses earning capacity which had not been utilised.  Having said but taking into account the present dire finances of the Husband, I find it is fair and reasonable to award nominal maintenance to the Wife at this stage to reserve her rights on ancillary reliefs.  I will so order accordingly.

Costs

53.  Since both parties are CSSA recipients, I decided that there be no Order as to costs of the ancillary reliefs trial, including all costs reserved, save and except the Respondent’s own costs be taxed in accordance with Legal Aid Regulations.

Section 18 Declaration

54.  Again given the present dire financial situation of the parties, I also grant a declaration under Section 18 of the Matrimonial Proceedings and Property Ordinance, Cap.192.

Orders

55.  I now grant the following Orders :-

(a)  The Respondent do pay to the Petitioner nominal maintenance of HK$1.00 per annum upon Decree Absolute;

(b)There be no Order as to costs, including all costs reserved;

(c)  The Respondent’s own costs be taxed in accordance with Legal Aid Regulations.

56.  I also direct a copy of this Judgment to be sent to the Director of Legal Aid (for the Wife) and the Law Society for their information.

FCMC 12807 / 2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 12807 OF 2013

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DECISION

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Introduction

1.  This is the hearing of a Summons issued by the Petitioner’s solicitors on 15 June 2015 on the following terms :-

“1. There be leave to file the Affidavit of Fiona Yem and its exhibits all dated the 15^th day of June2015 annexed herein;

2.The Respondent is to file his affirmation in reply within 7 days from the date of this Order; and

3.Costs on the cause.”

2.   According to the records, there was filed a document “Affidavit of Fiona Yem” together with exhibits on the same date of filing of the said Summons.  I will refer to this document as “the Affidavit”.

3.   This case was first scheduled for a Financial Dispute Resolution (“FDR”) on 27 February 2015 at 2:30 p.m.

4.  On 27 February 2015, the Court received a letter from the Respondent’s solicitors seeking adjournment of the FDR hearing that afternoon for the reason that the Respondent was suffering from serious flu.  The Respondent was advised by the doctor not to contact any other person and medical certificate for 2 days sick leave was attached.  The hearing was then adjourned to 3 June 2015 at 2:30 p.m.

5.  Practice Direction 15.11 (Financial Dispute Resolution Pilot Scheme) provides, inter alia, as follows :-

“8. The FDR hearing

a. …….

b. The judge conducting the FDR hearing shall have no further involvement with the Application, other than to conduct any further FDR hearing;

c. …….

d. …….

e.Not later than 7 days before the FDR hearing the applicant shall apprise the Court of details of all such offers, proposals and responses thereto by delivering an indexed and paginated FDR bundle containing the relevant documents, and at the conclusion of the hearing the FDR bundle shall be returned to the Applicant or Respondent as appropriate and not retained on the Court file.”

6.  There was no FDR bundle filed by Miss Yem, acting for the Petitioner claiming ancillary reliefs, pursuant to the said Practice Direction either before the initially scheduled hearing on 27 February 2015 or the re-scheduled hearing on 3 June 2015.  This Court made enquiry with Miss Yem for the reasons for non compliance with the Practice Direction.  The Court was provided with a simple and straight forward answer that no FDR bundle had been prepared. 

7.  Taking into account the prolonged delay of this case at the expense of public funds on both parties and the legal aid certificate for the Petitioner was recently discharged, also considering the fact that the Petitioner is going after a bankrupted Respondent for a relatively small amount of assets, this Court decided not to proceed with the FDR on that day and set down the ancillary reliefs claim for a trial on 2 July 2015 at 10:30 a.m. (1 day reserved).  Both parties were notified there and then that no FDR would be conducted by this Court on that day.  This was accepted by both parties.  With hindsight, this could only be arranged as there had never been filed the FDR bundle to apprise the Court the parties’ without prejudice proposals.   Further, I believe this is in accord with the spirit of the Civil Justice Reform under Order 1A rule 1 of the Rules of the High Court (“RHC”) for case management reasons and costs consideration.

The present Summons

8.  The terms of the present Summons are for leave to file the ‘Affidavit of Fiona Yem’.  Unless and until leave to do so was granted, any attempt to put it such an Affidavit is improper and should be discouraged.  Upon enquiry from this Court, Miss Yem attempted to explain by saying that the Affidavit was not meant to be filed, it was only meant to be a draft annexed.  This is, however, not the situation as the Affidavit clearly came in as a sworn document and ‘filed’ at the same time and separate from the present Summons rather than ‘annexed and form’ part of the Summons.  Had it been a draft, it would not have been sworn.  I do not accept Miss Yem’s explanation.  I also noted that there is no explanation in the Affidavit or at this hearing as to why this was so.  From the records of the last hearing on 3 June 2015 (which is 12 days before the present Summons was issued), this Court was not informed by Miss Yem that she would be seeking leave to file further affirmation.  Again from case management perspective, this is outrageous and completely affront to Order 1A rule 3 of the RHC which provides :-

“3. The parties to any proceedings and their legal representatives shall assist the Court to further the underlying objectives of these rules.”

The Affidavit of Fiona Yem

9.  Miss Yem at paragraph 1 deposed as follows :-

“1. The objectives of my Affidavit is to assist the Court to arrive at a just and fair decision on the Petitioner’s application for ancillary relief based on –

- all the information which the Court is entitled to have;

- the facts that have been properly adduced by the Petitioner and the Respondent; and

- in applying such information and facts in accordance with the correct interpretation of the law.”

10.  As said, the ancillary reliefs trial would be heard in about a week’s time (that is, 2 July 2015).  There are guidelines from the Court of Final Appeal (see LKW v. DD, (2010) 13 HKCFAR 537) as to how the Court should handle financial reliefs claim by spouses.  The 3 ‘limbs’ set out in paragraph 1 above, as I would put it this way, are nothing but stating the obvious. 

11.  I see no basis for Miss Yem to seek leave to file her Affidavit to state the obvious.  Apart from stating the obvious, I am more concerned with the use of the phrase ‘to assist the Court toarrive at a just and fair decision’ at this stage.  Reason being that the Court does not even have a chance to hear the evidence but was nevertheless ‘reminded/warned’ to arrive at a just and fair decision.  This might be close to posing an unscrupulous ‘threat’ to the Court.

12.  At paragraphs 4(a) to (k) under the sub-heading “3 proceedingsand costs order”, I do not see where they lead us to in so far as the forthcoming ancillary reliefs trial is concerned.  They are all relate to the past conduct of these proceedings under 3 consecutive petitions for divorce one after the other rather than touching upon the Petitioner’s ancillary reliefs claims. 

13.  At paragraph 4(l) where Miss Yem deposed verbatim as follows :-

“(l) Further all the pleadings are in the Court file for easy access in knowing that it was the Respondent who has caused the 2 consecutive proceedings to be issued. Therefore in the DECISION dated the 24^th of December 2014, the scathing attacks on the petitioner’s handling solicitor in having 3 proceedings and the intention to have the DECISION be posted it in the legal website a permanent form and be known to the legal circle are totally unfounded and uncalled for. While the guise of not having time to peruse the court documents is a lame excuse of not fulfilling one’s diligent duty and then jumped the gun to make the unfair comments. I take great exception to them and I reserve my right to take the matter further when necessary (my emphasis).”   

14.  I see nothing in this paragraph relates to, as Miss Yem so alleged at the beginning of this Affidavit, assisting the Court.  Rather, as I read it, is no more than a discourteous statement in flagrant breach of paragraph 10.07 of the Solicitors Code of Conduct.  The Decision of this Court dated 24 December 2014 referred to by Miss Yem had not been taken to any appeal.

15.  At the final paragraphs 5(1) to (12), they are all matters on discovery or alleged non-disclosure which should either form part of the cross examination at trial or be left to the final submission stage after all the evidence were received by the Court.  The Affidavit is not the right place to tender such submission. This is also not the correct time to make such submission when the trial had not yet started.

The Respondent’s position

16.  The Respondent was represented by Mr. Sam Yeung (“Mr. Yeung”) who acted upon the instructions of the Legal Aid Department.

17.  Mr. Yeung opposed the Summons and submitted that this is simply ‘a waste of time !!’ and seek a wasted costs order against Miss Yem personally under Order 62 rule 8 of the RHC. Mr. Yeung confirmed no Affirmation of Opposition would need to be filed.  Mr. Yeung also confirmed he had already notified the Legal Aid Department of the present Summons.

Decision

18.  This Court enquired Miss Yem whether the present Summons was issued as per the Petitioner’s instructions.  The answer provided was somehow odd.  Miss Yem said she had consulted the Petitioner because the Petitioner would not have the knowledge of the procedural aspects or the way forward on the conduct of the case. 

19.  Given such an answer from Miss Yem, I believe it is Miss Yem’s decision to take out the present Summons and to put in her personal Affidavit rather than acting upon her client’s instructions to do so.  This can also be reflected by her use of the words ‘my Affidavit’ in paragraph 1 of the Affidavit and the absence of those words such as ‘filed on behalf of the Petitioner’.

20.  In my decision, the present Summons must fail and be dismissed with costs for the following reasons.

(a) Miss Yem fails to justify the need for the filing her personal Affidavit on historic events over procedure undertaken which has no relevance or significance whatsoever to the Petitioner’s rights on ancillary reliefs, save and except to increase costs; 

(b)The Affidavit does not touch upon any of those factors under Section 7 of the Matrimonial Proceedings and Property Ordinance, Cap.192, of which the Court would have to consider at the ancillary reliefs trial proper; and

(c) In any event and on a basic procedural aspect, Miss Yem could not rely on her Affidavit which was put into Court without leave as her evidence in support of the subject leave application.  This is totally unacceptable. 

21.  For the above reasons, I decided to dismiss the Summons dated 15 June 2015 with costs.

Wasted Costs Order

22.  Pursuant to Order 62 rule 8(3) of the RHC, I direct there be a separate hearing on such application to be fixed after the final determination of the ancillary reliefs of the Petitioner.

Orders

23.  I now make the following Orders :-

(a) The Petitioner’s Summons dated 15 June 2015 be dismissed with costs;

(b)A date to be fixed after the final determination of the ancillary reliefs trial for the wasted costs order application by the Respondent;

(c) Respondent’s own costs be taxed in accordance with the Legal Aid Regulations.

FCMC 12807 / 2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 12807 OF 2013

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D E C I S I O N

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Introduction

1. This is the application by the Petitioner Wife (“Wife”) against the Respondent Husband (“Husband”) by way of Summons dated 8 August 2014 (“the Summons”).  There is also a supporting Affirmation (together with exhibits) of the handling solicitor Miss Fiona Yem (“Miss Yem”) for the Petitioner on the instructions of legal aid.  The terms of the Summons are as follows :-

“1. The Respondent is to disclose with all relevant documents of the whereabouts of the sale proceeds of HK$515,835.41 of Flat X on XX floor, Block X, Amoy Gardens, 77 Ngau Tau Kok Road, Kowloon (淘大花園).

 2.Costs to be provided.”

2.  Surprisingly, one day before the said Summons was filed, there was another Summons and supporting Affirmation of Miss Fiona Yem (together with exhibits) of exactly identical contents filed with the Court.  Upon clarification with Miss Yem at the outset of this hearing, this was a mistake of them and leave was granted there and then for withdrawal of the earlier Summons and the supporting Affirmation with no order as to costs.  This Court also refused to grant the Petitioner’s solicitors own costs against the Director of Legal Aid, which apparently was wasted through no fault of the Legal Aid Department or the aided person.

3. Still further, it transpired that the present Summons and the supporting Affirmation, although filed on 8 August 2014, was only served on the Respondent’s solicitors on 21 October 2014 (that is, some 73 days after the issuance) leaving with 28 days in advance of this hearing.  The reason provided by Miss Yem was that the rules provide for the time for service of summons is 2 clear days only.

4. In any event, the Respondent through his lawyers, also acting on the instructions from Legal Aid Department, filed his Affirmation in Opposition on 7 November 2014 together with exhibits.

Three (3) sets of proceedings?

5. It is worth to mention that there are 2 previous actions under FCMC No.4042 of 2011 and FCMC No.1136 of 2012 between the same parties.  For the sake of convenience, I will refer to those previous actions as “2011 case” and “2012 case” respectively.  Suffice also to say the Petitioner was represented by Miss Yem throughout in the 2011 case, 2012 case and in the present proceedings.

6. For the purpose of determining the present Summons, I am not prepared to venture into the history and background as to how and why, by referring to the year of the cases, there happened to be 3 consecutive cases between 2011 and 2013.  This is exceptionally unusual.  I am also sceptical about the handling and progress of this case since both parties are legally aided, not a so-called ‘big moneycase’ or involve any difficult questions of law or complicated sets of facts.  The situation is even worse when I noted that the Respondent was adjudged bankrupt on 30 December 2008 of which bankruptcy was discharged in 2012.  The Respondent was and is still a recipient of Comprehensive Social Security Assistance under the account of his mother Madam Chan since March 2012.  It is the Petitioner who has been pursuing ancillary reliefs.  Taking into account of the present situation, as rightly submitted by Mr. Yeung for the Respondent, it is highly doubtful as to how would all these perplex proceedings be bringing any practical financial reliefs to the Petitioner herself (leaving aside the fact that whatever financial reliefs she might obtain at the end of the day would also have to be subject to Legal Aid First Charge) save and except to the financial benefits of lawyers at the expense of public funds?  We are now at the post CJR era and the underlying aims and objectives in terms of costs effectiveness, case management and expediency must be strictly observed and adhered to.

The Petitioner’s Application

7. Miss Yem filed her Affidavit in support of the present Summons on behalf of the Petitioner.  This Affidavit consists of 16 paragraphs which I need to summarise and set out below.

8. At paragraph 1 of the Affidavit, reference was made to an Order dated 23 February 2012 granted by Deputy Judge Yim in the 2012 case where it provides, inter alia :-

“答辯人要存檔由二零零四年一月至二零零八年十二月之間之全部銀行戶口月結單, 證券及股票, 牛頭角物業資料, 破產令 HCB   9751/2008之一切有關文件, 及找不到工作之書面證明。”

9. At paragraph 2 of the Affidavit, it was conceded that the Respondent had filed a bundle of documents including牛頭角物業資料. 

10. Paragraphs 3 and 4 simply referred to the land search of the said 牛頭角物業. 

11. At paragraph 5 of the Affidavit, reference was made to a Statement of Account (which was produced and marked as exhibit “FY-B”) in respect of the sale of the 牛頭角物業showing a net balance due to the Respondent in the sum of $515,835.41.

12. Paragraph 6 of the Affidavit simply referred to the undisputed fact of the Respondent’s bankruptcy.

13. At paragraphs 7 to 10 of the same Affirmation, Miss Yem sets out her enquiries with Messrs. Neil Collins Corporation Advising Ltd, the Joint and Several Trustee for the Respondent’s estate after bankruptcy and the responses received.

14. Paragraph 11 of Miss Yem’s Affidavit referred to Messrs. Neil Collins Corporation Advising Ltd’s response being unclear.

15. Paragraphs 12 to 13 referred to the Respondent having made a “without prejudice” offer of settlement which had been responded to by the Petitioner.

16. Paragraphs 14 to 15 referred to the Petitioner having made a “Open Offer” but with no response received from the Respondent.

17. Paragraph 16 is the concluding paragraph seeking disclosure order.

The Respondent’s Affirmation

18. The Respondent in his Affirmation started by setting out the historical background starting from the 2011 case and the ancillary reliefs all along sought by the Petitioner in the 2011, 2012 and in the present case.  In addition, reference was made to events happened in the previous 4 hearings in the present case on 18/11/2013 (1^st hearing), 16/1/2014 (2^nd hearing), 16/5/2014 (3^rd hearing) and 25/7/2014 (4^th hearing) leading to the present Summons.

19. In gist, the Respondent objects on the ground that those information presently sought under the terms of the Summons were made 6 years after the Respondent’s bankruptcy or 2 years after the discharge of bankruptcy.  There is also the contention of relevance since the Petitioner all along in the 3 sets of divorce suits was seeking ancillary reliefs in specific terms of two catties of gold as opposed to a share in the net proceeds of sale of the said淘大花園.  In the Respondent’s Form Es filed in all 3 cases, he had accounted for the relevant amount of gold (which is about 10 tael in quantity) which had either been utilized or returned to the Petitioner.  The net proceeds of sale of 淘大花園 had been utilized for repayment of debts prior to his bankruptcy.

The applicable principles

20. There is no issue as to the provisions under which the Wife is seeking discovery or specific discovery. Rule 77(4) of the Matrimonial Causes Rules Cap.179A (“MCR”) provide :-

“(4) Any party to an application for ancillary relief may by letter require any other party to give further information concerning any matter contained in any affidavit filed by or on behalf of that other party or any other relevant matter, or to furnish a list of relevant documents or to allow inspection of any such document, and may, in default of compliance by such other party, apply to the court for directions.”

21. Besides, Order 24 Rule 7 of the Rules of the High Court (“RHC”) which is applicable to matrimonial proceedings by virtue of Rule 3 of the MCR is also relevant. 

22. It is trite law that to invoke Order 24 Rule 7 of the RHC, there are 3 prerequisites, namely, relevance, existence and possession of the documents sought for discovery.  Once a prima facie case has been made out by the party seeking such order, the court has a discretion whether or not to order disclosure (see Paul’s Model Art GMBH & Co KG –v- UT Ltd [2006] 1 HKC 238).  It is then for the other party objecting disclosure to show that it is not necessary for disposing fairly of the cause or issue in question or for the purpose of saving costs (see Hong Kong Civil Procedure 2012, Vol 1, para 24/8/1).

Is there a prima facie case?

23. Given the nature of this application being interlocutory, evidence was produced by way of affirmations without oral testimony.  This follows that the answer to this very first question need to be found by reading the contents of the supporting affirmation which, for this application, was filed by Miss Yem on behalf of the Petitioner.  From reading each and every paragraphs of Miss Yem’s Affidavit, I am not convinced that a prima facie case has been made out in favour of the Petitioner’s Summons seeking disclosure.  Miss Yem’s Affidvait only pointed to the undisputed fact that once there was the property at 淘大花園 which had been disposed of with a net balance of HK$515,835.41 due to the Respondent around February 2007.  However, such undisputed fact had existed at all times even long before the Respondent was adjudged bankrupt 1 ½ year later in December 2008.   

24. The Respondent in his evidence had not disputed of having received such net proceeds of sale but allegedly had spent them for repayment of debts prior to his bankruptcy.  This is the answer provided. Miss Yem in her submission in reply on the question of relevance of the information sought under the terms of the present Summons vis-à-vis the ancillary reliefs of two catties of gold sought under the prayer of the Petition was that the Petitioner should be entitled to know the whereabouts of the net proceeds of sale of the淘大花園 property.  Say for example, whether the Respondent had spent them for purchasing other assets instead of repayment of debts.  With respect, I do not agree with Miss Yem.

25. Given the answer of the Respondent as to the whereabouts of the net proceeds of sale of the淘大花園 property, the real issue which calls for determination at the ancillary relief trial would fall upon whether the Respondent’s answer of having spent the net proceeds of HK$515,835.41 towards repayment of debts is credible or believable and whether such sum should or should not form part of the family assets of which the Petitioner should be given a share of it. 

26. In my decision, unless the Petitioner is able to show a prima facie case in the supporting Affidavit that the Respondent had spent the money to acquire other assets as opposed to his alleged repayment of debts, it is simply a question of determining the Respondent’s credentials rather than seeking disclosure of the whereabouts of the said net sale proceeds.  The right to seek such disclosure as to whereabouts of the net sale proceeds could only be asserted if the Respondent’s answer had already been discredited or that there being a prima facie case that such answers are not believable had been made out by the Petitioner in the supporting Affidavit.  However, none of this is forthcoming.

The Respondent’s Bankruptcy

27. It is also important to note that the Respondent was adjudged bankrupt on 30 December 2008, which is over 1 ½ year after he received the said net proceeds of sale of HK$515,835.41.  He is statutory bound to declare his assets and liabilities by using the form of Statement of Affairs which need to be sworn and submitted to the Official Receiver. 

28. Unless the Petitioner is able to show the information contained in the Statement of Affairs (which had been produced by the Respondent as exhibit to his Affirmation) is incorrect or incomplete, there is no room for this Court to disbelieve and reject the contents therein and then to find the Respondent had concealed the net sale proceeds in the Statement of Affairs so as to justify an Order in terms of the present Summons.  By reading the Affirmation of Miss Yem, I am not convinced that the Petitioner has been able to establish such a case to support her Summons.

Conclusion

29. For the above reasons, I find against the Petitioner and that her Summons dated 8 August 2014 must be dismissed.  Since both parties’ are legally aided, I decided not to grant any costs order save and except both parties’ own costs be taxed in accordance with Legal Aid Regulations.

Others

30. As stated, I am sceptical about the progress of these proceedings of having 3 sets of divorce suits one after the other and which had lasted for over 3 years.  I believe this is the right time for the Legal Aid Department (for the Petitioner) to thoroughly review the entire matter from its inception to ensure public funds had been and would be properly and effectively incurred for attainment of justice between the parties as opposed to others’ financial benefits.

31. I direct a copy of this Decision be provided to the Legal Aid Department (for the Petitioner).