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W v I

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date09 April 2008
Year2008
Judgement NumberFCMC10365/2006
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC010365/2006 W v. I

FCMC 10365 of 2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 10365 OF 2006

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BETWEEN
W Petitioner
and
I Respondent

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Coram : H.H. Judge Bruno Chan in Chambers

Date of Hearing : 14th March 2008.

Date of Judgment : 9th April 2008.

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J U D G M E N T

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1. This is the Petitioner Wife’s application for maintenance pending suit against the Respondent Husband for herself and the only child of the family, a son now aged 19 and is studying in a college in the U.S. The Wife used to run a property development business in China together with the Husband until the breakdown of their marriage in about 2005 when her involvement ceased. She claims to have exhausted all her own means after the Husband stopped his maintenance payment since October 2005, and hence her application now before me.

The Background

2. First, some relevant background. The Wife is now aged 47 and the Husband 51. Both were born and raised in Fujian, China and received university education there. The Wife is said to have come from a well-off and influential family with both parents as high-ranking officials in the Chinese government, with her father in particular said to be the head of the Foreign Ministry of the Fujian Province at one time.

3. In 1983 the parties were married in Fujian, and in 1988 they came to settle in Hong Kong after the Wife’s parents had earlier been posted here by the Chinese government. Shortly thereafter the Wife gave birth to the son, and in 1989 she started an import/export business trading in China making, in her words, millions of dollars. The parties soon bought their first property in Hong Kong at City Garden in North Point as their matrimonial home through a holding company called L Development Ltd.(“LD”) held by them in equal share. With profits generated from the Wife’s trading business and with the assistance of bank mortgages, they began to invest in the property market through LD Ltd. and 2 other companies incorporated by them, and there was a time when LD held 3 residential properties and 3 business premises.

4. From the period between 1992 to 2005, with the help of the Wife’s parents and an uncle who used to be a legislator in Hong Kong, the parties were able to develop 3 major property projects in Hangzhou namely LV, CB and PS in chronological order, with the Wife mainly responsible for the promotion and sale of the units in Hong Kong and other parts of Asia, and the Husband for the daily operation of the companies which owned the projects, i.e. Hangzhou LL Property Development Ltd.(“Old LL.”) held by LD Ltd. and 2 other nominee companies of the parties for LV, and Hangzhou New LL Property Development Ltd.(“New LL”) also held by LD Ltd. as the majority shareholder for the other 2 projects, including the financial/funding and supervision of the projects, hence he was, and still is, stationed mainly in China.

5. By 1997 all the houses of the first project LV had been sold and Old LL Ltd. made, according to the Wife, several hundred millions of dollars which were retained by the Husband for the development of the subsequent projects. On the other hand, due to the economic downturn at around the same time in Hong Kong, the parties’ properties in Hong Kong held by LD Ltd. all turned into negative equity and the Wife started to experience serious cash flow problems with the mortgagee banks which threatened with foreclosure actions, and when the Husband refused to divert sufficient money from Old LL Ltd. to Hong Kong to help, she had to sell some of the properties over the next few years to reduce the financial burden.

6. As a result the parties’ relationship turned sour and in 1998 they met in Hong Kong to discuss their marital problem, during which the Wife suggested a divorce and to divide the profits from the LV project between them, but later changed her mind when the Husband offered that they should continue to develop their property business in China, and that he would remit RMB50,000 per month to her to meet her family’s needs and various other expenses in Hong Kong.

7. In 2001 after the former matrimonial home had been foreclosed by the mortgagee bank, the Wife and the son moved into a rented apartment, and the Husband then adjusted his regular monthly remittance for them to HK$40,000 per month, plus additional payments from time to time.

8. In 2003 the Wife set up several B.V.I. companies in Hong Kong at the request of the Husband including one known as RW Architects & Consultants Ltd.(“RW”) into which he would transfer money from New LL Ltd. from time to time. The reason for these transactions is not entirely clear between the parties, as the Husband’s case is that they were for use in the design and advertisement for their property projects in Hong Kong, but the Wife claims that the moneys would normally be converted into RMB and transferred back to the Husband’s personal bank accounts.

9. Despite their property development business apparently doing well in China due to its booming property market, the parties continued to have disagreements over various money matters, and in 2004 their relationship turned for the worse when the Wife’s father was hospitalised after a heart attack and they had a major dispute over the Husband’s contribution towards the medical expenses.

10. In April 2005 the Wife’s father died from his illness, and the parties had another serious disagreement over the Husband’s contribution towards the funeral expenses. The Husband then requested the Wife to file her tax return separately from his from then on, and thereafter failed to return to Hong Kong for months including missing their traditional family gathering at the Mid-Autumn Festival.

11. In September 2005 the Wife discovered that the Husband had without her knowledge back in 2003 caused LD Ltd. to transfer all its majority shareholdings in New LL to a company owned 99% in total shareholding by him known as PB (Asia) Ltd.(“PB”) to the effect that 97% of New LL have since been held by PB Ltd. with the remaining 3% by another company known as Zhejiang NC Ltd. held by the Husband together with his parents and a friend.

12. At about the same time the Husband transferred $5 million to RW Ltd. in Hong Kong allegedly for planning and designing work for the projects in China. Upset by her discovery of his shares dealings referred above and believing the money came from New LL Ltd. in which she was interested, the Wife instead put the money in the account of a company known as HT Enterprises Ltd.(“HT”) owned and controlled by her and refused to return them to the Husband, which in turn led him to stop remitting any more maintenance payment to her.

13. Matters finally came to a head when the Husband returned to Hong Kong in early October 2005 and met with the Wife at the matrimonial home for discussions about a possible divorce and division of their matrimonial assets which turned into an argument when the Wife refused to return the $5 millions, during which she accused the Husband of using violence on her resulting in bruises on her face and body, and causing her to flee from her home to take shelter at a friend’s place.

14. The parties later met again in a restaurant for further discussion and the Husband agreed to draft an agreement on the division of assets for the Wife’s consideration. A few days later the Wife returned to the matrimonial home to find the Husband already returned to China but left behind what appears to be a draft document dated 12th November 2005 for the Wife to guarantee that she would save up the said $5 millions properly and would only use the money to maintain herself and their son (Paginated Bundle : 518). He has since stopped his monthly remittance of $40,000 to the Wife.

15. Upon his return to China, the Husband signed a transfer of shares agreement on 26th April 2006 transferring all his shares in PB Ltd. to his father at a stated consideration of $990,000 but which he has subsequently conceded was never paid, as a result his father now holds 97% of New LL Ltd. which had assets worth more than RMB 54 millions according to its accountant report for the year ended 31st December 2005(PB : 519), and on the Wife’s case should now be worth even more at RMB 1 billion today after taking into account of the higher average price of its 2 projects in China.

The Proceedings

16. In June 2006 the parties met again in Hong Kong for further discussion about their divorce and the division of assets but again failed to reach any agreement. The Wife then left for the U.S. with the son to look for a college for his future enrolment. Upon her return to Hong Kong she discovered that the Husband had in July 2006 issued a writ in the High Court against her together with RW Ltd. and HT Ltd. as defendants for the return of the said $5 millions. One month later the Wife instituted these proceedings for divorce against the Husband on his unreasonable behaviour, and also sought maintenance pending suit and post-decree ancillary relief.

17. In her Financial Statement (Form E) filed on 18th October 2006, the Wife claimed to be still a director of HT Ltd. earning only $12,000 per month with virtually no assets or savings but more than $16 millions in debts. She also disclosed a monthly expenditure of about $185,600, including $45,000 for the son in the U.S., hence her need to seek maintenance pending suit in that amount.

18. In response the Husband filed his Form E about 3 weeks later on 6th November 2006, a very sparingly made document apparently in his own hand writing despite the fact that he was then already legally represented, in which he revealed that he had given away all his shareholdings in PB...

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