L v L

Judgment Date18 November 2005
Subject MatterMatrimonial Causes
Judgement NumberHCMC1/2003
CourtHigh Court (Hong Kong)
HCMC000001A/2003 L v. L

HCMC 1/2003
(Edited Version)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MATRIMONIAL CAUSE NO. 1 OF 2003

(formerly known as Family Court Matrimonial Cause No. 9860 of 2001)

______________________

BETWEEN

“L” Petitioner
and
“L” Respondent

____________

Before : Hon Lam J in Chambers (not open to public)

Dates of Hearing: 16-18, 21-25 February 2005;
1-4, 7, 9, 11, 14, 16, 18 and 31 March 2005;
1, 4, 6-8, 19-22 April 2005 and 7, 8, 12 and 13 July 2005
Date of Judgment: 18 November 2005

______________________

J U D G M E N T

______________________

1. The parties in this case were married in 1991 although they had been together since at least 1971. Throughout the years, they had managed to build up very substantial wealth from scratches. According to the reckoning of the experts, their joint wealth as at December 2004 was between $947 million and $1,346 million. Decree absolute of divorce was granted on 16 March 2002. Despite the fact that there were two agreements in 2000 and 2001 respectively between the parties as to the disposal of some their major assets, unfortunately they were unable to reach agreement on the overall settlement regarding their financial affairs. As a result, the matter has to be resolved by the court through a very costly ancillary relief application. According to the estimates submitted by the parties, the total legal costs incurred for this application run up to about $50 million.

2. In this judgment whenever reference is made to details, I would use abbreviations instead of spelling out the full names or particulars. I believe the parties and their legal advisers should have no difficulty in identifying whom or what I am referring to.

The court’s approach in ancillary relief applications

3. At the outset, I would respectfully quote from two recent judgments of Thorpe LJ. In Para v Para [2003] 1 FLR 942 at 949 Para. 22, His Lordship said,

“… the outcome of ancillary relief cases depends on the exercise of a singularly broad judgment that obviates the need for the investigation of minute detail and equally the need to make findings on minor issues and disputes. The judicial task is very different from the task of the judge on the civil justice system whose obligation is to make findings in all issues and dispute relevant to outcome. The quasi-inquisitorial role of the judge in ancillary relief litigation obliges him to investigate issues he considers relevant to outcome … But this independence must be matched by an obligation to eschew over elaboration and to endeavour to paint the canvas of his judgment with a broad brush rather than with a fine sable. Judgments in this field need to be simple … in structure and simply explained.”

4. In Lambert v Lambert [2003] 1 FLR 139 at Para. 38,

“Whilst I accept Mr Pointer’s submission that the judge has a duty to assess each and every one of the Section 25(2) criteria that bear on outcome and equally that judges of the Family Division have great expertise in making value judgments, I do not accept that the duty requires a detailed critical appraisal of the performance of each of the parties during the marriage. Couples who cannot agree division are entitled to seek a judicial decision without exposing themselves to the intrusion, indignity and possible embarrassment of such an appraisal. I fully agree with Coleridge J that any other approach encourages a vain endeavour to recreate historic situations, choices and failings which in the context of a long marriage can never be recaptured fully or accurately.”

5. In Lambert, Thorpe LJ also endorsed the following dicta of Coleridge J in G v G (unreported, cited in Para.20 of Lambert) in the context of a discussion on stellar contribution,

“… the parties are not assisted to achieve compromise when they are encouraged by the law to indulge in a detailed and lengthy retrospective involving a general rummage through the attic of their marriage to discover relics from the past to enhance their role or diminish their spouses. Perhaps ‘obvious and gross’ has a renewed role here. “Obvious” because it imports the concept of very easily discernible and ‘gross’ in the sense of it being abnormally large. Unless this or something similar is soon introduced to curb these debates I fear there is a danger that the forward looking White innovations will be lost in a sea of post break-up, backward-looking mutual recrimination and the court’s task and role in this already uncertain area will thereby be set back at least a generation.”

6. It is important to bear in mind the guidance in these passages in dealing with ancillary relief applications. It would be inappropriate for the court to go into every minute detail concerning what had happened in the past. In the present case, counsel have indeed exercised very sensible judgment in that regard and as a result, court’s time was spent on more useful purposes. Further, subject to the contentions by Mr Mostyn QC on bigamy and adjustments on the basis of negative contribution, it is common ground that equal division is appropriate on the facts of the present case. In other words, irrespective of the positions taken by the parties in their affirmations, by the time of trial, broadly speaking both sides accepted the other party had contributed equally to the welfare of the family. Hence, it would not be necessary for this court to discuss at length as to what had happened in the past.

Background

7. Although there is a dispute as to whether the parties had been validly married, I shall refer to them as husband and wife in this judgment. The Husband was born in 1941 (hence he is 64 years old) and he came to Hong Kong from mainland China in 1962. He started off as a casual labourer in the construction industry. Later on, he became a sub-contractor in that industry. He first set up a business in the entertainment industry in 1965 in the form of a beauty parlour.

8. The Wife was born in 1935 (hence she is 70 years old). Her family operated a business selling bedroom accessories and she had assisted in the running of the business. Her mother died when she was seven and her father remarried. She was looked after by her paternal grandmother. When she was about 16 years old, her grandmother “married” her to LW, a staff of the family business. There is a dispute between the parties whether such union constituted a marriage in the eyes of law. That, as explained below, has a bearing on the validity of the subsequent marriage between the parties. By the union with LW, the Wife gave birth to four children. The eldest child was born in January 1953. The youngest was born in 1960.

9. By late 1950’s, the family business was not doing too well. LW went to work as a tram conductor and the Wife worked as hawker and part-time maid. LW joined the trade union and spent most of his time on union activities. He neglected the Wife and the children. He made no contribution to the household. In 1962, LW went his own way and the Wife regarded that to be the end of that relationship.

10. To support herself and the four children, the Wife became a ballroom hostess and later, a masseur. Through someone working in the beauty parlour, the Wife came to know the Husband. When the Husband set up his beauty parlour, she worked there.

11. The beauty parlour was not particularly successful. In the 1970’s, the couple operated several entertainment establishments. There is disagreement between the parties as to when they actually started living together. In view of what I have said above regarding the proper approach in ancillary relief applications, that disagreement is not too significant. At the latest, they were living together when they operated the business of LWC in 1971. There is no child borne out of the union between the couple. They accumulated sufficient wealth from these businesses to buy a flat for their matrimonial home in Happy Valley without any mortgage in January 1976. They also started the operation of YD Restaurant and Night Club [“YD”] in that year. YD was run through a corporate vehicle and there were some third party shareholders.

12. The business of YD was not plain sailing from the start. It had a difficult time at the beginning. In 1977, the couple had to sell the property at Happy Valley to finance a revamp of YD. The restaurant side of the business was closed down. The nightclub was repackaged and TV stars were invited to perform at the grand opening of the revamped YD. That proved to be a shrewd decision and the business of YD prospered after the revamp. By December 1977, they were able to buy a property in College Road for investment purpose. Further properties were acquired in City One, Shatin in the early 1980’s.

13. In December 1984, the business operation of the couple was brought to a new height with the grand opening of Club B. It was again financed by the sale of their joint property. This time it was the College Road property. Again there were outside shareholders including some with good business connections. Both of them worked hard in running Club B. In their testimonies, both the Husband and the Wife acknowledged the other party to be an equal partner in business. Each of them played an important role in the success of the business.

14. Club B generated substantial wealth for the couple. In 1988, another nightclub business called Club M was set up in the adjacent premises. In 1989, two properties were acquired in the sole name of the Husband. The property at Beacon Hill Road had been used as the matrimonial home since its acquisition. The couple lived there until separation. In August 1999, the Husband moved out. The Wife remains there until now. In these...

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