FCMC 10082 of 2002
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
NUMBER 10082 OF 2002
Coram : Her Honour Judge Chu in Chambers
Date of Hearing : 27 September 2005
Date of Handing Down of the Reasons : 10 October 2005
REASONS FOR DECISION
1. The Petitioner (“the Wife”) and the Respondent (“the Husband”) are in the midst of an ancillary relief trial, with the Wife having given evidence, and the trial has been adjourned part-heard, to be resumed on 17th October 2005.
2. One of the major issues in the ancillary relief application is the extent of the Husband’s assets. There had been lengthy discovery of the Husband’s means prior to the commencement of the trial. In answer to one of the Wife’s questionnaires, in February this year, the Husband disclosed, for the first time, that he was an authorized signatory of two bank accounts held by a company T Ltd with the HSBC. What the Husband said at that time was that T Ltd was beneficially owned by his friend, a Mr. Lam, who is a PRC citizen who was working and living in Mainland China. In answer to further questionnaires, the Husband said that he did not have any information as to the director or shareholder of T Ltd, and that although he was a signatory to two of its accounts, Mr Lam had never asked the Husband to help in effecting transactions in relation to T Ltd, and thus the Husband had no knowledge as to the transactions of T Ltd.
3. During the adjournment, the Wife continued with her investigations of the Husband’s means, and found out the following :
(i) T Ltd is in fact the registered owner of two properties, which for convenience sake, I shall call “the Park Tower Property” and “the Island Resort Property”. The Agreement for Sale and Purchase for the Park Tower Property was signed on 16th January 2003, the Assignment was signed on 4th March 2003, and the consideration was HK$6.8m. There was a mortgage loan from Chartered Bank which was paid off on 27th October 2004. The Agreement for Sale and Purchase for the Island Resort Property was signed on 8th September 2003, the Assignment was signed on 30th October 2003, and the consideration was HK$2.998m. There was a mortgage loan from HSBC which was paid off on 3rd January 2005.
(ii) the Agreement for Sale and Purchase, Assignment, and the Legal Charge for both properties were executed by a Ms Lam on behalf of T Ltd. The Wife has alleged that Ms Lam , who used to work as a clerk in one of the parties’ companies, is the Husband’s mistress or girlfriend.
(iii) the Husband transferred a sum of HK$500,000 to T Ltd, on about 29th September 2003, about 3 weeks after the Agreement for Sale and Purchase of the Island Resort Property was signed, but before the Assignment was signed.
(iv) the Husband had failed to disclose a bank account with the Standard Chartered Bank, which is the mortgagee bank of the ParkTower Property.
4. The above discovery led the Wife taking, inter alia, the following steps :
(i) issuing an application under s.17 of the Matrimonial Property and Proceedings Ordinance, to set aside the transfer of the sum of HK$500,000 (“s. 17 application”) from the Husband to T Ltd.
(ii) filing affirmations to allege that T Ltd is holding the two properties as nominees for the Husband.
(iii) issuing an application to join T Ltd as a party to the ancillary relief application (“joinder application”).
5. The Wife’s s. 17 application had been served on T Ltd, and I gave directions for the application to be heard together with the Wife’s ancillary relief application, and leave for T Ltd to file an affirmation in opposition.
6. The Wife will also be asking this Court to declare that T Ltd holds the two properties as nominees or in trust for the Husband in the ancillary relief trial and it is for this purpose that the Wife issued the joinder application which was before me. T Ltd opposed the joinder application. Initially, the Husband took a neutral position, but by the time the application was heard before me, he also opposed the application.
7. As the trial is due to re-commence in about 3 weeks’ time, after hearing the arguments, I made an order on the same day that T Ltd be added as a party, with reasons to be handed down later. Here are my reasons.
8. The Wife’s joinder application was made under O.15 R. 6 (b) of the Rules of the High Court, and there is no dispute regarding the legal principles. This court may order T Ltd be joined if : -
(i) the presence of T Ltd before the court is necessary to ensure that all matters in dispute may be effectually and completely determined and adjudicated upon, or
(ii) between T Ltd and the Husband / the Wife , there exists an issue arising out of the ancillary relief application which in the opinion of this court it would be just and convenient to determine as between T Ltd and the Husband / Wife.
9. By the time of the hearing, further matters had been disclosed by Ms Lam, and the undisputed facts were as follows :
||There were 2
payments to T Ltd by the Husband :
||a sum of HK$500,000 on 29th September 2003
||sum of HK$360,000 on 24th February 2003
mentioned above, the Husband was the signatory of two bank accounts
of T Ltd with HSBC
signed two guarantees, respectively for the mortgage loans for the
purchase of the two properties
T Ltd’s CASE
10. T Ltd is a company incorporated in British Virgin Islands on 18th November 2002, and Ms Lam is the only registered shareholder with her address given as the Park Tower Property. Ms Lam claimed that it was her brother Mr. Lam who asked her to set up the company and that T Ltd was in fact at all material times beneficially owned by her brother Mr. Lam. She said it was Mr. Lam who instructed T Ltd to purchase the two properties and that all the monies required for the acquisition belonged to Mr. Lam. According to Ms Lam, her brother Mr Lam has been trading in antiques for many years, and that around 1995 to 2000, he had made profits of...