IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
SUIT NO. 2767 OF 2004
Coram : H.H. Judge Bruno Chan in Chambers
Date of Hearing : 5 – 9, 30 September 2005
Date of Judgment : 28 October 2005
J U D G M E N T
1. There are two matters before me, the parties’ application for ancillary relief upon the granting of a decree nisi of divorce to the Petitioner Wife on 28th May 2004, and the Respondent Husband’s application for defined access to the only child of the family, J, a son born on 10th September 1998 and is now just 7 years old, after having conceded at the hearing that his custody care and control be granted to the Wife.
2. The Husband, now 43 years of age, and the Wife, now 39, first met in 1993 in London where he was a citizen and was studying for a Master degree in Systems Analysis and Designs at City University in London, after completing an undergraduate degree in marketing in Canada, while she was from Hong Kong working as a fashion designer in London. She was then also running a fashion design business in Australia financed by her father, with shops in Australia, a factory in China and an office in Hong Kong. As a result she would travel extensively between these places. While in London, she lived in her own flat at B House, which was also purchased by her father who is the chairman and substantial shareholder of a Hong Kong public listed construction company.
3. In about 1994 the Husband came to work in Hong Kong as an information technology salesman during which he stayed in a flat in Tsuen Wan owned by the Wife’s parents. There is some dispute between the parties over whether or not the Husband did pay rent for the flat, which I do not find necessary to resolve here as it is in my view of no bearing on the matters before me.
4. In 1996 the Husband moved back to London to work at his father’s family company, U Ltd. There is again some dispute as to how long he had work at U Ltd. He claims he worked there for 6 weeks, but the Wife says it lasted only 2 days as he could not get along with his brother who was the managing director of the company. The evidence on this is not clear, but the upshot is that the Husband left U Ltd to work for another company called L Bureau, and in September of the same year the parties were married in Cheshire and lived together in the Wife’s B House property.
5. About 3 months after the marriage the Husband left L Bureau to move to M in Weybridge, London where he earned about £41,000 a year including commission. In fact all his jobs during the marriage were mainly computer software related.
6. In early 1997 the parties wanted to start a family and decided that they needed a bigger place to live. The Wife turned to her father for assistance who then lent the parties the money to purchase a 3-storey property known as S A’s Villas in London for £645,000 which was put in the Wife’s sole name, while the B House flat was subsequently sold by the Wife with all the sale proceeds returned to her father.
7. In addition the Wife’s father also assisted the parties with the costs for the renovation and furnishing of S A’s Villas, but it is in dispute between the parties as to the amount, which the Wife puts at more than £150,000 from her father, whilst the Husband contends that only £70,000 may have come from her father while he himself had also paid £40,000 towards the renovation from his salary. In any event after the Husband received a sum of £364,286 in 1998 and a further £206,766.79 in 1999 from the sale of his U Ltd. shares, he repaid £160,000 to the Wife’s father for his loan for the purchase of the property.
8. Between 1996 and 1998 the Wife began selling her fashion business and gradually recovered about HK$2 million in total which she put into her mother’s National Westminster Bank current account of which she was one of the signatories. It was from this account that the Wife would from time to time draw cheques to meet the family’s expenses including some of the renovation and furnishing expenses for S A’s Villas, as well as with her Goldfish credit card of which she was the principle holder and the Husband a supplementary card holder, which would then be reimbursed by funds from the parties’ joint HSBC account.
9. Around March 1998 the Husband changed his job to L R where he earned a basic salary of about £45,000 per annum with bonus of approximately £25,000. He says he remained at L R until around February 2000, which the Wife believes to be much shorter, but in any event after L R the Husband started his own business called E Limited with 3 other partners, and invested £40,000 into that company from the sale proceeds of his U Ltd. shares.
10. Later in 2000 with the departure of his partners, the Husband asked the Wife to be a director and company secretary of a new company known as F Limited which continued the business of E Limited from their home at S A’s Villas.
11. Unfortunately F Limited was unsuccessful and was eventually wound up in June 2003. In about August 2003 the Wife and J left London to return to settle in Hong Kong where she took up a position in her father’s public company as a corporate development manager. She says it was her joint decision with the Husband to return to Hong Kong to make a fresh start, where he could market the software that he had developed at F Limited, but the Husband alleges that it was the Wife’s own decision to return to Hong Kong against his wish which had led to some serious arguments between them at that time.
12. The Husband was then working on a new project called C with 4 other partners, which later became formalised as C Ltd in November 2003, for which he was given 20% of the shares. He thereafter ceased involvement with C Ltd and in December 2003 came to Hong Kong to join the Wife and the child, but he says he was unwelcome there and so he stayed for only 7 weeks before returning to London where he initially stayed at S A’s Villas before moving into his parents’ home in mid-2004.
13. He remained unemployed from February to June 2004, living on unemployment benefit and thereafter he worked on a commission basis for N Internet for about 6 months making only about £500 in total. Later he became unemployed again and eventually in early 2005 he decided to move to Vancouver Canada where he has dual citizenship. Initially he was employed as a free lance consultant with T Consulting Inc. for several months and earned CAD6,000 in total. Since June 2005 he has been employed as a business development associate with S Software Limited where he earns CAD40,000 per annum, being CAD2,400 per month (HK$15,600) after tax. He is at present renting a room in a friend’s house, although it is not clear whether he has been paying rent on a regular basis, as he says he would sometime pay in kind by doing chores for his friend.
14. Since their return to Hong Kong in August 2003, the Wife and the child have been staying in one of her parents’ properties at Yau Yat Cheun, Kowloon used to be occupied by her grandmother. The Wife was also given HK$1 million by her father for decorating and furnishing the flat, for which she spent about $830,000 with the balance still in her bank account. She says she is not required to pay her parents any rent for the 2 bedroom flat, but she would be responsible for its management fees and household utilities, and that she has been told that when her younger brother marries in future, she and her son will have to move out to make room for him and his family.
15. The Wife now earns HK$25,000 per month at her father’s company plus a year’s end double pay, giving her a monthly average of HK$27,000. She has enrolled J into K Junior School where he is now doing Primary 2, and has hired a domestic servant to look after him while she works.
16. In May 2004 the Wife caused S A’s Villas to be sold through her estate agent in London for £1.35M and after various deductions including the repayment of the balance of the original purchase price of £485,000 to her father, the net proceeds of about £843,959.53 (as at 12th September 2005) was stake held by her solicitors in an interest bearing account with the Hongkong and Shanghai Bank pending the determination of these proceedings.
17. On 19th March 2004 the Wife filed a petition for divorce based on the Husband’s behaviour, and also asked for custody care and control of J and general ancillary relief. On 28th May 2004 the decree nisi of divorce was granted to her uncontestedly, with the question of custody and ancillary relief adjourned to Chambers. As aforesaid the Husband subsequently agreed that custody care and control of J be given to the Wife but the question of his access to J including his trips to Canada for staying access remains unresolved, as well as the division of the sale proceeds of S A’s Villas, which is really the central issue between the parties.
18. The Wife proposes that £150,000 of the sale proceeds should first be repaid to her father for his financial assistance given to the parties for the refurbishment and other costs of S A’s Villas, as well as certain expenses including council tax and utilities bills incurred by the Husband while at S A’s Villas but paid by her on his behalf in the total sum of £487.38, with the balance of £693,472.15 to be divided into 2 equal shares between them, but out of the Husband’s share of £346,736.08 or the equivalence of HK$4,854,305, HK$358,086 should first be repaid to her for the various sums paid on his behalf including his tax due to the Hong Kong Inland Revenue Department during his stay in Hong Kong, and a further sum of HK$240,000 being security for 2 years of his maintenance for J, leaving a final balance of HK$4,256,219...