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Lcjwy v Lcks

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date30 June 2015
Year2015
Judgement NumberFCMC16239/2013
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC16239/2013 LCJWY v. LCKS

FCMC 16239/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO.16239 OF 2013

----------------------------

BETWEEN
LCJWY Petitioner
and
LCKS Respondent
and
CWKC 1st Intervener
LLC 2nd Intervener

----------------------------

Before : HH Judge Bruno Chan in Chambers
Dates of Hearing : 22 May and 4 June 2015
Date of Decision : 30 June 2015.

-----------------------------------

DECISION
(SPECIFIC DISCOVERY)

------------------------------------

1. There are several matters before me but the main disputes are essentially about the Petitioner Wife’s 2 discovery summons respectively against the Respondent Husband and his parents the 1st and 2nd Interveners for information and documents relevant to the forthcoming trial in August 2015 of the preliminary issue over the beneficial ownership of certain properties including companies legally held by the Husband but which he claims to be on trust for the Interveners and hence should be excluded from the Wife’s claims for ancillary relief upon the dissolution of their 10 odd years marriage.

2. The remaining matter is the Husband’s summons against the Wife for production of copies of various bank documents and for her to answer his 3rd Questionnaire, of which I understand had been resolved by the time of the hearing but the Husband wishes to seek costs against her for that summons.

Background

3. The Husband is now aged 39, and the Wife 38. Both come from wealthy local banking families and were married on 30th November 2002 with 2 daughters now aged 9 and 8. The Husband is a solicitor and a consultant of a law firm but works mainly in his family’s business, while the Wife has been a housewife throughout the marriage. As for the other background information relevant to the applications now before me, I propose to adopt as follows most of the Chronology of Events attached as Appendix B to the Wife’s Skeleton Argument, the accuracy of which I understand to be of no serious issue except perhaps some small discrepancies as to some of the dates mentioned therein:

Date Event
26 Jun 1975 Husband was born
15 Sep 1976 Wife was born
1978 Husband’s sister S was born
Sept 1979 GC Ltd incorporated with Husband’s parents each held 1 share for purchasing agricultural and grassland in the New Territories
1980 WS Ltd incorporated with Husband’s mother holding 60,000 shares
1980s I-Trust established with Husband and sister as beneficiaries and mother as protector
1986/1987 Husband’s father diagnosed with neurodegenerative disease
1988 Father appointed mother as attorney to deal with his financial and personal affairs
1993 Mother and Husband were appointed directors of GC Ltd with 1 share allotted to the Husband
Oct 1995 London Property purchased in Husband’s name
Sept 1996 GW Investment Ltd incorporated
June 1997 Husband finished studies and returned from England
1999 Husband’s parents filed for divorce
24 May 1999 Husband was appointed director and given 1/3 shareholding in GW Ltd
Oct 1999 Husband’s sister S returned from England
8 Nov 1999 GW Investment purchased Po Garden Property and rented out
17 Nov 1999 1 share in GW Investment was allotted to Husband’s sister S
21 Jan 2000 HF Consultant Ltd incorporated
9 July 2001 Mother resigned as director and transferred her 1 share in GC Ltd to Husband who was appointed the director
2001 Mother remarried
19 Jan 2001 HF Consultants allotted 2 shares to Husband and 1 share to Father
Feb 2002 HF Consultants purchased Regent-on-the-Park Property
30 Nov 2002 Parties married in Hong Kong
Early 2003 Parties moved into Regent-on-the-Park Property as their 1st matrimonial home
13 July 2005 Elder daughter was born
Sep 2005 Parties moved into Po Garden Property as their 2nd matrimonial home
9 Mar 2007 Younger daughter was born
Aug 2007 Regent-on-the-Park Property was sold with sale proceeds used to pay off Po Garden Property’s mortgage, HK$1 million to the Husband and for the purchase of another property known as The Merton
18 Mar 2008 1 additional share allotted to father
Mar 2012 Husband moved out of Po Garden Property for 3 months after domestic disputes with Wife and returned in May 2012
18 Dec 2012 Father transferred his 2 shares in HF Consultancy to Husband’s sister S

4. It is against this background of the Husband’s family and the parties’ marriage that now brings me to their divorce proceedings which were commenced on 12th November 2013 when the Wife filed for divorce against the Husband based on his unreasonable behaviour and sought custody of both daughters and general ancillary relief for herself the daughters, with a 1st Appointment for both CDR and FDR fixed for hearing on 7th April 2014.

5. Meanwhile the parties were directed to file and exchange their Form E which then triggered off what can be described as a whole series of extensive and very often contentious discovery applications leading to the ones now before me.

6. In his Form E filed on 27th February 2014 [A1/50] the Husband disclosed a monthly income in excess of HK$280,000 and a net value of his assets of about HK$32 million, but he also revealed that the following assets under his name are in fact held on trust for either of his parents and hence not included in his net value:

(a) his one share in GW Investment Ltd which holds the parties’ matrimonial home at Po Garden Property of which he valued at HK$43 million is on trust for his father;

(b) his legal title of the London Property which he valued at GBP 2 million is on trust for his father;

(c) his 2 shares (50%) in HF Consultants is held on trust for his father;

(d) his one share in WS Ltd is held on trust for his mother;

(e) his one share (50%) in GC Ltd is held in trust for his mother;

(f) Various bank accounts and securities account of total value in excess of HK$8 million under his name are held on trust for either of his parents.

7. With these assets valued at least HK$77 million and probably more taking into account of those lots of land held by GC Ltd, and in the absence of any express declaration of trust for any of them, it is not surprising that the Wife takes issue with all of these alleged trusts, and her discovery applications almost immediately jumped into full gear starting with a very extensive and comprehensive 28-pages questionnaire [A1/183].

8. In response the Husband on 22nd April 2014 filed his list of objection to those requests which he found objectionable in particularly those relating to those companies which he allegedly holds on trust and has no beneficial interests save for documentary evidence in support of the trust relationship [A1/240].

9. On 30th May 2014 the Husband filed his answer to those requests in the Wife’s said questionnaire which he was willing to disclose, together with a supportive affidavit of his mother (1st Intervener) in which she dealt with those issues over the various companies and assets said to be held by the Husband on trust for either herself or the 2nd Intervener, which can be summarised essentially as follows:

(a) that the father established I-Trust for the Husband and his sister S as beneficiaries with the mother as the protector of the trust with certain assets held under a trust company known as I-Investment Ltd to secure for their education expenses, and upon their graduation from university the trust was subsequently wound up with the legal and beneficial interests in the trust company vested in the Husband and S equally, which are the only assets given to them by their parents;

(b) that the father developed a neurodegenerative disease in about 1986/1987 which has since left him completely bedridden and to lose his speech and requires round-the-clock medical care;

(c) that the parents divorced in 1999 with an amicable financial settlement, and the mother remarried in 2001;

(d) that the London Property was purchased by the father but put in the name of the Husband as he was then studying in UK and that it was for the family’s use;

(e) that the Regent-on-the-Park Property was purchased with a sitting tenant by the mother as an investment for the father through HF Consultants, and that the Husband was later made a shareholder of HC Consultants only for the purpose of learning to manage properties under the mother’s supervision;

(f) that upon the parties’ marriage and when the Regent-on-the-Park Property became vacant and the parties were looking for a place to move, they were allowed to reside that property by paying a monthly sum of HK$12,500 for its use and to pay for its renovation and other expenses;

(g) that upon the sale of the said property the Husband was paid HK$1 million out of the sale proceeds as reimbursement of the renovation expenses, with the rest paid to the father for his own use including funding the purchase of the Merton Property;

(h) that the Po Garden Property was also purchased as an investment for the father through GW Investment and similarly the Husband and S were made shareholders of the company to learn to manage properties, and that when the Husband needed a bigger home for his family upon the birth of his elder daughter, the parties were allowed to move into this property on similar conditions as before for the Husband to be responsible for all outgoing expenses;

(i) that GC Ltd was formed by the parents for purchasing agricultural and grassland in the New Territories as long term investments in anticipation of future government’s development in those rural areas, and the mother’s transfer of...

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