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Mimi Kar Kee Wong Hung (Also Known As Mimi Kar Gee Wong Hung) v Raymond Kin Sang Hung

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date18 May 2015
Year2015
Citation(2015) 18 HKCFAR 210
Judgement NumberFACV11/2014
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV10/2014 RAYMOND KIN SANG HUNG v. MIMI KAR KEE WONG HUNG (also known as MIMI KAR GEE WONG HUNG)

FACV Nos. 10 & 11 of 2014

FACV No.10 of 2014

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO.10 OF 2014 (CIVIL)

(ON APPEAL FROM CACV NO. 197 OF 2012)

_______________________

Between MIMI KAR KEE WONG HUNG
(also known as MIMI KAR GEE WONG HUNG)		 Petitioner
(Respondent)
And
RAYMOND KIN SANG HUNG Respondent
(Appellant)

_______________________

FACV No.11 of 2014

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 11 OF 2014 (CIVIL)

(ON APPEAL FROM CACV NO. 197 OF 2012)

Between

MIMI KAR KEE WONG HUNG
(also known as MIMI KAR GEE WONG HUNG)		 Petitioner
(Appellant)
And
RAYMOND KIN SANG HUNG Respondent
(Respondent)
_______________________
Before: Chief Justice Ma, Mr Justice Ribeiro PJ,Mr Justice Chan NPJ, Mr Justice Stock NPJ,Lord Walker of Gestingthorpe NPJ
Date of Hearing and Judgment: 16 April 2015
Date of Reasons for Judgment: 18 May 2015

___________________________

REASONS FOR JUDGMENT
___________________________

Chief Justice Ma:

1. In applications for ancillary relief in matrimonial proceedings, the court is given wide powers to make orders for financial provision. The jurisdiction is contained in ss 4, 6, 6A and 7 of the Matrimonial Proceedings and Property Ordinance (“the MPPO”),[1] where the court is able to make orders for financial provision (by way of periodic payments and lump sums etc) and for property adjustment. These orders can take effect immediately or, sometimes, they may take effect only in the future. We were in the present appeal concerned with a type of order that takes effect in the future in which the Court has ordered that upon the occurrence of a contingency, there will accrue to one of the parties to a dissolved marriage a stated or perceived benefit.

2. The particular order with which this appeal was concerned was in the following terms:-

“Contingent upon the commencement of the redevelopment of Severn Villa by ADHL within the lifetime of the wife, the husband do pay the wife a further sum representing one half of the notional increase in the value of the 418,945,640 ADHL shares attributable to the redevelopment (less HK$230 million and all costs and expenses [of] or relating to the redevelopment), such value to be agreed, failing which the same to be assessed by an independent court expert to be appointed by the Court and such payment to be paid within one month of the final determination of such valuation.”

3. This type of order has been called a clawback order.[2] The nature of such an order and the type of factors that ought to be considered by a court before such orders are made, fell to be considered in the context of the present case. Three questions, which I shall presently set out, were identified by the Appeal Committee[3] as being questions of great general or public importance, and leave to appeal was accordingly given to the Respondent Appellant, Mr Raymond Kin Sang Hung (“H”). The Appeal Committee also granted leave to appeal to the Petitioner Respondent in this appeal, Ms Mimi Kar Kee Wong Hung (“W”) in relation to the form of the clawback provision. I shall also elaborate on this presently.

4. After hearing counsel,[4] we allowed H’s appeal (FACV 10 of 2014) and dismissed W’s appeal (FACV 11 of 2014). The clawback order referred to earlier was ordered to be set aside.

5. Before going into the reasons for the Court’s decision, I should first set out the relevant background.

A BACKGROUND

A.1 Facts

6. H and W married in 1973. They had two daughters and a son. The parties separated in 1999 and W petitioned for divorce on 25 February 1999 citing unreasonable behaviour. The decree absolute was not granted until 18 March 2010. Neither the reasons for this nor the history of the divorce proceedings are relevant to the present appeal and it is therefore unnecessary to say more about this aspect.

7. The context of the present appeal was W’s application for ancillary relief following the couple’s divorce. At stake were combined assets in excess of HK$1 billion, comprising a collection of antique furniture worth about $749 million,[5] some jewellery worth about $1.3 million, paintings and artefacts of the value of over $42 million and shares in the company, Applied Development Holdings Limited (“ADHL”) valued at over $330 million. In the lower courts, issues arose in relation to all these assets, but in this appeal we were concerned only with the ADHL shares.

8. In 1975, the parties formed a company manufacturing electronic products, Applied Electronic Limited (“AEL”). The majority shareholders were initially W’s uncle and aunt, who had provided most of the company’s startup capital. Their shareholding was later transferred to H and W. In 1986, AEL went public and was listed on the Hong Kong Stock Exchange as ADHL. The parties retained 50% of the shareholding.

9. Notwithstanding their separation in 1999, the parties continued to work within the company and its related and subsidiary companies. W was up until 2010 an executive director of the company and at some stage also its executive chairman. In March 2010, after the divorce proceedings became active again, W was removed as executive director of ADHL.[6] Her entitlement hitherto to housing also ceased. This housing consisted of an apartment at Severn Villa, located in Severn Road on The Peak.

10. Severn Villa is a four storey residential building comprising six units. Four of these were owned by Severn Villa Limited (“SVL”), a wholly owned subsidiary of ADHL. It is in relation these four units (“the Severn Villa Property”) with which the present appeal was concerned. The remaining two units in Severn Villa were owned by other persons.

11. Apart from the Severn Villa Property, ADHL also owned two properties located in the British Virgin Islands and Panama, held with a view to the development of hotel resorts. ADHL was essentially a property investment company.

12. At this point, it is important to recognise that neither H nor W at any stage owned the Severn Villa Property themselves: they were merely shareholders in a company (ADHL) which had a wholly held subsidiary company (SVL), and it was this subsidiary company which held the property. ADHL was not even some sort of corporate vehicle which held the property for them; the company was a public company, had other shareholders and also had business interests other than the Severn Villa Property. As recorded by the judge who tried the matter at first instance,[7] at one stage W claimed that the Severn Villa Property belonged beneficially to her and that SVL held the property on trust for her, since she had provided the purchase money through the sale of some properties in the United States. Following her removal as a director of ADHL, W instituted proceedings[8] making the claim that SVL held the legal title to the Severn Villa Property as a matter of “corporate convenience”. This claim came on for trial in April 2011 and on the first day of trial, W accepted she had no sustainable claim. The action was dismissed and she paid costs on an indemnity basis.

A.2 The proceedings below

13. The application for ancillary relief was tried in the Court of First Instance before Deputy High Court Judge Carlson in a hearing lasting 14 days. At the beginning of his judgment, the learned judge had this to say:-

“2. It is very easy to be wise after the event, but I am bound to say that with more than enough assets to go round between them and with a modicum of common sense and good judgment this is a dispute that could have been settled quickly and, for a case of this size, relatively cheaply.

3. I am afraid that this has become an object lesson in how matrimonial litigation should not be conducted. I have not been able to add up the total precisely, but the parties joint costs for this and the related action which I had consolidated with these matrimonial proceedings must exceed $50 million. The parties have fought each other before me for over two years. I have lost count of, and I don’t care to count, how many written rulings and judgments I have had to deliver or hand down. They have gone to the Court of Appeal twice before trial and before the Companies’ Judge on one occasion. The proceedings have seen me into retirement from the bench and I have returned as a retired judge to try this matter and its related action.”

14. These remarks have some relevance to a point which I shall develop below regarding the need to consider the desirability of finality, particularly in matrimonial litigation, when a court makes orders taking effect in the future in the form of the clawback order in the present case.

15. In the Court of First Instance, W did not seek a clawback order at all. Following the approach laid down by this Court in LKW v DD[9], the parties and the judge proceeded to look into and assess the value of the matrimonial assets I have identified earlier.[10] The evidential focus of the trial was not so much on the value of the assets (as to which there was much agreement between the parties) but mainly over an issue which was no longer a live one in the appeal before us, namely, an allegation by H that W had taken away 27 items (worth over $78 million) in the Hung Collection.[11] Much of the learned judge’s judgment dealt with this issue. There were also a number of legal issues, one of which was the appropriate proportion to be applied in the division of assets: W sought a 60/40 division in her favour, H submitted that an equal division was appropriate.

16. As regards the value of ADHL’s shares, this was agreed between the parties’ experts.[12]...

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