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Wysl v Fhcba

Judgment Cited authorities 14 Cited in 1 Precedent Map Related
Vincent
Judgment Date26 July 2019
Neutral Citation[2019] HKCA 814
Year2019
Judgement NumberCACV399/2018
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV399/2018 WYSL v. FHCBA

CACV 399/2018

[2019] HKCA 814

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 399 OF 2018

(ON APPEAL FROM HCMC NO 8 OF 2016)

________________________

BETWEEN
WYSL Petitioner
and
FHCBA Respondent
and
FHTEJ (in his personal capacity) 1st Intervener
and
FHTEJ (in his capacity as the administrator of the estate of the Respondent’s father, FJA) 2nd Intervener
and
LKPR 3rd Intervener

________________________

Before: Hon Kwan VP, Chu JA and Barma JA in Court
Date of Hearing: 18 June 2019
Date of Judgment: 26 July 2019

________________________

J U D G M E N T

________________________

The Court:

A. INTRODUCTION

1. This appeal is brought by the Wife against the judgment of Anthony Chan J on an application for ancillary relief and an application to set aside dispositions pursuant to section 17 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”). The interveners are the Husband’s elder brother (“Brother”), the Brother in his capacity as the administrator of the estate of the Husband’s father (“Father” and “Estate”), and the Husband’s mother (“Mother”). Judgment was given on 19 July 2018 after a trial involving oral evidence that lasted five days at the end of May and early June 2018.

2. The judge dismissed the Wife’s application under section 17 of the MPPO in respect of various properties which, on the interveners’ case, had belonged beneficially to the Father and then to the Estate. He ordered the Husband to pay the Wife a lump sum payment of $24 million and that the payment be made within four months from the date of the order with liberty to apply.

3. Orders nisi were made for the costs of the two sets of proceedings[1]. In respect of the costs of the application for ancillary relief, the Husband was ordered to pay the Wife’s costs with a certificate for two counsel, and credit was given to the total sum of $3.44 million already paid by the Husband to the Wife as legal costs provision. For the section 17 application, the Wife was ordered to pay the costs of the Husband and the interveners, with a certificate for two counsel.

4. The Wife seeks to set aside the judgment on the ancillary relief application and the section 17 application and asks this court to substitute its discretion for that of the judge, alternatively that the matter be remitted to the Court of First Instance for rehearing by a different judge.

5. The Wife concedes that her case is a “needs” case and not a “sharing” one, although it was contended that the scale of wealth of the Husband is important to assessing her needs claim.

6. It is the Husband’s contention that as the Wife’s claim for ancillary relief is a “needs” case, the dispositions sought to be set aside under section 17 (whether successful or not) would not have any impact on the Wife’s ultimate award.

7. There is no dispute about the relevant legal principles. Comprehensive guidance on the principles and steps to be taken in the exercise of the discretionary powers when making orders for ancillary relief under section 7 of the MPPO has been given by the Court of Final Appeal in LKW v DD (2010) 13 HKCFAR 537. The dispute is about the application of the legal principles to the facts of this case.

B. BACKGROUND

8. We will first set out the relevant factual background, as taken from the judgment.

B1. The marriage

9. As stated in the judgment:

“4. The Husband and Wife were born, respectively, in August 1968 and August 1971 (she is aged 46)[2]. They began their relationship in 2002 and were married in January 2005. They separated in December 2014. The Wife petitioned for divorce on 31 March 2015 and the decree nisi was pronounced on 26 November 2015.

5. This was a childless marriage of about 10 years. However, the couple wanted to have children, and for that purpose the Wife had undergone extensive medical procedures including IUI, IVF and surgery[3] over the course of 6 years involving 8 failed pregnancies.”

B2. The Father

10. The judgment has this to say about the Father:

“23. He came from a rich family, but he was a successful businessman in his own right. He was active in making various investments, including shares and properties, and had a stock brokerage business (Brokerage).

24. On matters of investment, the Father trusted only himself and was fully in control. He did not rely on any of his children on such matters, despite the fact that the Brother was acting as his personal assistant from 1995 or 1996. He did not trust the investment acumen or ability of any of his children.

25. The Father suffered from a life threatening lung decease in about the end of 2003. With the help of the best medical care, he managed to recover from it. From about 2005, his condition stabilised and began to improve. However, he had to carry an oxygen tank with him all the time to assist his breathing.

26. In about February 2015, the Father was unwell and admitted to hospital. To the surprise of his family, his condition deteriorated rapidly and he passed away on 2 March 2015.”

“65. A few words have already been said about the Father. He was very much the dominant patriarch of the family. The evidence shows that he was a careful man with his money, and he did not treat his family differently in this regard. The Husband was not given an extravagant allowance or any gift of such nature. The only exceptions were 3 sizable cash gifts on his birthdays[4]. Although there were properties acquired by the Father in his name[5], there is no evidence that he ever benefited from them financially or was in control of them. He always dealt with them as instructed by his father.

66. The evidence suggests that the Father did not relinquish control of any asset to his children. However, he did not like to deal with paperworks, and he relied upon the Brother for the same.

67. There is a long history of the Father having his assets held in the names of his children, which preceded his illness in 2003 and the marriage in question:

(1) In March 1994, when the Father (born in 1941) was in his early 50s, he asked his investment partner, Ms Wong, to transfer her 3,500 shares in K C Ltd to the Brother (then 27 years old) to hold them on his behalf. The Interveners’ case that these shares were held by the Brother for the benefit of the Father is not disputed;

(2) In 1998, the Father opened a Hang Seng Bank account in the name of the Brother and one in the Husband’s name (Account A). They were then aged 31 and 30. I shall have to come back to Account A below as one of the Disputed Properties;

(3) In mid-2000, the Father set up 3 HSBC Private Bank accounts under each of his children’s names[6] to hold funds for him and to build up their credit profiles for obtaining loan financing for him in the future;

(4) In 2001, the Father instructed the Brother and Husband to each hold 38% of his interest in a newly incorporated company (Company) which took over the Brokerage as a result of him being reprimanded by the SFC. The brothers also held accounts with the Company to facilitate the Father’s securities trading.

(5) In 2002, the Parents’ Home[7] was purchased by the Father in the names of his children, then respectively 35, 34 and 26 years old, with the view to avoid estate duty. …”

11. We would mention here that the shares of K C Ltd[8] have been held by the Brother, the Husband and the Sister since 2004 in equal proportion, save that the Brother holds one extra share. There were other companies with the shares jointly held by the three children in the same way and they were used by the Father as corporate vehicles in property and other investments. Two of them were mentioned in the judgment, W H Ltd and B Ltd.

12. There were other instances when the Father purchased properties in the name of one of his children. In March 2010, he bought a property at Tai Hang Road for $32,510,000 in the name of the Brother, which was then used by the Brother as his matrimonial home. Also in March 2010, the Father bought a property at Centre Stage in Hollywood Road with a sitting tenant in the name of the Husband at $14,680,000 (“Flat A”). In January 2011, he bought another property at Centre Stage with a sitting tenant at $16,590,000 in the name of the Sister, who was then living with her parents.

B3. The Trust and the Estate

13. The judge said this about the Trust and the Estate:

“27. The Father set up a trust (Trust) in June 2004 when he was quite ill. It was a private discretionary trust to provide for his wife and children. Each of them is entitled to ¼ of any distribution from the Trust. The Husband’s entitlement under the Trust is one of the disputes in this case.

28. The Father died intestate. It is uncontroversial that the Mother is entitled to ½ of the Estate, and the children each entitled to 1/6. The Estate is administered by the Brother.”

“128. The Trust is a typical discretionary trust. It was stated in clause 3.3 of a Confidential Memorandum dated 12 December 2012, which contained the Father’s wishes, that “[u]pon the death of [the Father], the Trustee would consider holding and distributing the Trust Fund as to both income and capital of the Trust Fund … for the benefit of [the Mother and the children] … absolutely in equal shares”.

129. There is no dispute that the Trust Fund is worth US$27 million and the Husband’s ¼ interest is worth about HK$55.7 million. There has been no distribution from the Trust.”

B4. The Husband and his income

14. The judge gave this account about the Husband and his income:

“6. The Husband did not perform well in school. He completed high school education in USA, followed by a 2‑year certificate course in Hotel and...

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  • Re Cheung Kwan
    • Hong Kong
    • Court of Appeal (Hong Kong)
    • 12 March 2021
    ...evidence and factual aspects in the hope of persuading the appeal court to come to a different view from the primary judge (WYSL v FHCBA [2019] HKCA 814 at §42). 34. Applying the above principles, we turn to consider the grounds of appeal. 1st ground of appeal: failing to apply legal princi......

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