UNKNOWNHis Honour Judge I Wong18/11/2024[2024] HKFC 207
FCMC12188/2006
A A
FCMC 12188 / 2006
[2024] HKFC 207 B
B
C IN THE DISTRICT COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D D
MATRIMONIAL CAUSES
E
NO. 12188 OF 2006 E
F ---------------------------- F
G G
BETWEEN
H H
HYCJ The Petitioner
I I
J and J
K K
LCSJ The Respondent
L L
---------------------------
M M
Coram: His Honour Judge I Wong in Chambers (Not Open to Public)
N N
Date of Hearing: 30 August 2024
Date of Judgment: 19 November 2024 O
O
P __________________ P
Q JUDGMENT Q
( Appeal against Master’s decisions – Charging Order Absolute )
R R
__________________
S S
T T
U U
V V
-2-
A A
1. This is an appeal against a master’s decision to grant a
B charging order absolute against the respondent’s property at Mei Foo Sun B
Chuen (“the respondent’s property”).
C C
D D
Background
E
2. The petitioner was the wife and the respondent the husband E
in these matrimonial proceedings. Since the parties have long ceased to
F F
be married, I shall address them as the petitioner and the respondent in
G this Judgment. G
H H
3. The parties married in July 1992. This was a childless
I marriage. I
J J
4. In September 2006, the petitioner petitioned for divorce on
K the ground of two years separation. K
L L
5. At all material times (before the divorce and up to now) the
M petitioner has been living in Canada and the respondent has been living in M
N
Hong Kong.
N
O O
6. The divorce proceedings were uneventful and went smoothly.
P The parties soon arrived at a settlement over the financial matters as a P
result of which a consent summons dated 27 January 2007 was filed to
Q Q
court for endorsement.
R R
7. Decree nisi was granted on 28 March 2007. On the same
S S
day, a consent order on the terms of the consent summons was granted. I
T shall refer to this consent order as “the 2007 Consent Order”. T
U U
V V
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A A
8. The decree nisi was made absolute on 22 June 2007.
B B
The 2007 Consent Order
C C
9. The essential terms of the 2007 Consent Order were that the
D D
respondent was to transfer two properties to the petitioner plus a
E
periodical maintenance of CAD 8,000 per month. E
F F
10. The first property, which I refer to as “the Belcher
G Property” in this Judgment, was owned by a Company that presumably G
was controlled by the respondent. The respondent undertook to procure
H H
his company to transfer the Belcher Property to the petitioner free of
I encumbrances on or before 31 December 2008, failing which the I
respondent was to pay her $8,500,000 forthwith.
J J
K 11. The second property was in the name of the respondent. I K
shall refer to this property as “the Broadway Property”. The respondent
L L
was to transfer the Broadway Property to the petitioner free of
M encumbrances no later than 60 days upon the making of the decree M
N
absolute.
N
O O
12. Despite containing a periodical maintenance order, the 2007
P Consent Order – following the consent summons - was expressed to be P
for full and final settlement between the parties.
Q Q
R The Petitioner’s Charging Order Proceeding R
13. Then more than 16 years later in December 2023, the parties
S S
appeared in court again. This time it was on the petitioner’s application
T for a charging order against the respondent’s property. T
U U
V V
-4-
A A
14. The application was made in the usual fashion by way of an
B ex-parte application supported by an affirmation dated 19 December 2023 B
(“the Supporting Affirmation”).
C C
D D
15. On 4 January 2024, a Charging Order Nisi was granted.
E
Thereafter, the parties duly exchanged their affirmations and appeared E
before a master on 18 July 2024 when the master granted a Charing Order
F F
Absolute. This Charging Order is the subject matter of the present
G appeal lodged by the respondent on 31 July 2024. G
H H
Master’s Appeal
I 16. It is trite that an appeal from a master’s decision to a judge in I
chambers is a de novo hearing, and the judge will deal with the matter in
J J
question as if it came before him or her for the first time: see Hong Kong
K Civil Procedure (2024) at para 58/1/2. K
L L
The Petitioner’s Supporting Affirmation
M 17. Probably due to the fact that the petitioner was living in M
N
Canada, her Supporting Affirmation for the ex-parte application was
N
made by her solicitor. The affirmation simply referred to the
O O
maintenance order of CAD8,000 per month under the 2007 Consent
P Order and said the maintenance in arrears had accrued up to CAD72,000 P
plus interest of CAD2,771.46, totalling CAD74,771.46 (or
Q Q
HK$435,763.59).
R R
The Respondent’s Affirmation in Opposition
S S
18. The respondent has been acting in person in the Charging
T Order proceeding. T
U U
V V
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A A
19. The respondent did not state any relevant facts on the
B Affirmation in Opposition. He just exhibited the following: B
C C
(1) An English homemade handwritten agreement (“the Homemade
D Agreement”) dated 6 July 2012 and signed between the D
E
petitioner and the respondent. E
F F
(2) Some correspondences between the parties spreading from 7
G December 2015 to 7 May 2024, containing various schedules G
prepared by the respondent setting out the payments made by
H H
him. The last one was an email dated 7 May 2024 written by the
I respondent to the petitioner in which he provided particulars of I
payment and claimed to have overpaid her CAD161,500.
J J
K The Petitioner’s Affirmation in Reply K
20. It was in the Affirmation in Reply that sets out the
L L
petitioner’s case. Her case can be briefly stated as follows.
M M
N
21. The petitioner said while the respondent did transfer the
N
Broadway Property to her pursuant to the 2007 Consent Order, due to the
O O
respondent’s financial difficulty, he failed to procure the transfer of the
P Belcher Property or pay the $8,500,000 instead. P
Q Q
22. Negotiations between the parties ensued; and they were able
R to come to some verbal agreements (“the Verbal Agreement”). It was R
agreed that the respondent would purchase another property for her
S S
instead of the Belcher Property. In addition, the respondent would pay her
T “compensation”. The compensation was originally agreed to be the rental T
of this new property but was later changed to a monthly sum of $10,000.
U U
V V
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A A
B 23. Subsequently, a property referred to in this Judgment as “the B
Shan Shing Property” was purchased in December 2009 in substitute for
C C
the Belcher Property and the respondent started paying her compensation
D D
$10,000 monthly as from February 2010.
E E
24. It was not the end of the matter. What followed were
F F
apparently further negotiations, which resulted in another agreement that
G this time was reduced into writing. It was the Homemade Agreement G
exhibited by the respondent in the Affirmation in Opposition. It is
H H
necessary to set out the text of this agreement in full:
I I
J (DIVORCE CASE) J
Pending Settlement(s):
K K
1. HK$ 4,000,000.00 to be settled: -
A. Paid on July /06, 2012 HK$ 1M by S Chartered Cheque #
L 68XXXX L
B. To pay by end of Sept., 2012 HK$ 1M (Deposit into HSBC a/c
# 082XXXXXX-XXX)
M M
C. Starting from Aug/01, 2012, to pay HK$ 105,000.00 every 3
months.
N D. WILL Try to complete settlement of the Full Amount by June N
/30, 2013.
2. Monthly payment of C $8,000.00 to be reduced to C$ 5,500.00
O O
from July/01, 2013 onward.
P Agreed & confirmed by: -- P
____(Signed)__________ ___(Signed)_________
Q Q
(Name of Petitioner) (Name of Respondent)
July/06 2012 July/06 2012
R R
S S
T T
The Law and Practice regarding Charging Order
U U
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A A
25. The court has power to impose a charging order for securing
B the payment of any money due or to become due under a judgment or B
order of the court on a judgment debtor’s property specified in the order:
C C
section 52A(1), District Court Ordinance (Cap 336). The money due
D D
must be an ascertained sum: see Hong Kong Civil Procedure (2024), at
E
50/9A/19. E
F F
26. In deciding whether to make a charging order the court has
G to consider all the circumstances of the case and, in particular, any G
evidence before it as to –
H H
(a) the personal circumstances of the debtor; and
I (b) whether any other creditor of the debtor would be likely to be I
unduly prejudiced by the making of the order: section 52A(2),
J J
District Court Ordinance (Cap 336).
K K
27. The general principles governing the exercise of the
L L
discretion to make a charging order are summarized in para 50/9A/23 of
M the Hong Kong Civil Procedure (2024): M
N N
“1. The question whether a charging order nisi should be made
absolute is one for the discretion of the court.
O O
2. The burden of showing cause why a charging order nisi should not
be made absolute is on the judgment debtor.
P 3. For the purpose of the exercise of the court’s discretion there is, in P
general, no material difference between the making absolute of a
charging order nisi on the one hand and a garnishee order nisi on the
Q Q
other.
4. In exercising its discretion the court has both the right and the duty
R to take into account all the circumstances of a particular case, whether R
such circumstances arose before or after the making of the order nisi.
5. The court should so exercise its discretion as to do equity, so far as
S S
possible, to all the various parties involved, that is to say, the
judgment creditor, the judgment debtor and all other unsecured
T creditors. Cf Wardley v. Aik San Realty Ltd [1985] 2 H.K.C. 695 T
above.
(The above principles which were stated by Lord Brandon in Roberts
U U
V V
-8-
A A
Petroleum Ltd v. Bernard Kenny Ltd [1982] 1 W.L.R. 301 ,
307; [1982] 1 All E.R. 685 at 690, CA are not affected by the reversal
B of that case by the House of Lords [1983] A.C. 192; [1983] 1 All E.R. B
564 .)
C 6. The liquidation of a company, whether by a resolution for voluntary C
winding up or by a compulsory order for winding up brings into
operation a statutory scheme for dealing with the company’s assets,
D and accordingly if such liquidation occurs after the making of the D
charging order nisi and before such order is made absolute, the court
E in its discretion will decline to make the charging order absolute, E
( Roberts Petroleum Ltd v. Bernard Kenny Ltd [1983] A.C.
192; [1983] 1 All E.R. 564 , HL, reversing [1982] 1 W.L.R.
F 301 ; [1982] 1 All E.R. 685 , CA on this last point…” F
G Discussion G
28. It is clear that even on the petitioner’s version there was the
H H
Verbal Agreement that departed from the original bargain in a material
I respect as contained in the 2007 Consent Order. By the time of the I
Homemade Agreement, the landscape of parties’ settlement had further
J J
changed in a significant way. The Belcher Property was long gone and
K replaced by the Shan Shing Property. The $8,500,000 and its payment K
date were gone and was replaced by $4,000,000; probably by the time
L L
when it was signed, the respondent had already settled $4,500,000. The
M M
remaining $4,000,000 was to be paid by instalments with a proviso that
N the respondent would “try to complete settlement of the full amount by 30 N
June 2013”.
O O
P 29. Significantly, there was no mention of the $10,000 P
compensation as alleged by the petitioner.
Q Q
R 30. Notwithstanding that there was an express date (ie 1 st July R
2013) on which the CAD8,000 was to be reduced to CAD5,500, it seems
S S
the parties agreed that it was only when the $4,000,000 had been paid in
T full that the CAD5,500 would come into effect. T
U U
V V
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A A
31. It transpired that there were at least 3 disputes between the
B parties. B
C C
32. First, the petitioner claimed full payment has never been
D D
achieved. There is a letter dated 14 January 2016 sent by her then
E
solicitors to the respondent in which the petitioner said, out of the said E
$4,000,000, the respondent still owed her $130,000. It is worthy to note
F F
that this letter was exhibited in the Affirmation in Opposition and not by
G the petitioner. I shall return to this letter in the later part of this Judgment. G
H H
33. Subsequently, in response, there was a “Payment History”
I prepared by the respondent on 14 June 2019 where he set out the I
payments (42 payments in total) he had made from January 2016 to June
J J
2019 and claimed he had already paid the alleged arrears of $130,000.
K K
34. The petitioner did not (and does not) agree to the
L L
respondent’s stance. This is the first dispute.
M M
N
35. Second, there was a dispute that arose from parties’ different
N
stance regarding the nature of the said monthly sum of $10,000. The
O O
respondent seemed to be saying that this monthly sum went to the
P satisfaction of the $4,000,000 but the petitioner did not agree. It is to be P
recalled that the petitioner said in the Affirmation in Reply that it was for
Q Q
her “compensation”. On this, it struck me that in her email dated 6
R February 2015 to the respondent, the petitioner claimed the said $10,000 R
is part of the terms in the monthly “alimony”.
S S
T 36. There is a third dispute. The respondent said in his email T
dated 7 May 2024 to the petitioner that, according to his record, he had
U U
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A A
overpaid CAD161,500. In support, he set out the particulars of payment
B and concluded that he did not owe the petitioner any money. He asked B
the petitioner to verify the records to which apparently she did not
C C
respond. Again, this email was adduced by the respondent.
D D
E
37. Ms Lee, counsel for the petitioner, fairly conceded that these E
disputes were live issues between the parties and the petitioner was aware
F F
of them before the taking out of the present Charging Order Proceeding.
G G
38. At this juncture, I need to turn to the relevant procedure.
H H
I 39. The procedure for obtaining a charging order is a two-stage I
process, namely:
J J
(1) obtaining a charging order nisi on an ex parte affidavit (rule
K 1(2)) and K
(2) the making of an order absolute on the further consideration of
L L
the matter (rule 3); see also Hong Kong Civil Procedure (2024)
M at 50/9A/12. M
N N
40. It is trite that on an ex parte application, an applicant (ie the
O O
petitioner in the present case) has a duty to make full and frank disclosure
P of the material facts. The relevant principles are summarized by P
Recorder Steward Wong SC at [45] of his Judgment in Tsui Yun Bun
Q Q
Barry v. Law Wan Tung [2019] HKCFI 2955:
R R
(1) Material facts are those which are material for the Court,
S when determining the ex parte application, to know and S
which are necessary to enable the Court to exercise its
discretion properly. Those are facts which should have
T T
been put in the scales by the ex parte Court, and not only
facts which are determinative one way or another.
U U
V V
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A A
(2) Materiality is to be decided by the Court and not by the
applicant or his legal advisers.
B (3) The applicant has a duty to make proper enquiries before B
making the application and the duty of disclosure covers
C not only facts known to the applicant but facts which he C
would have known had he made such proper inquiries.
(4) The matter to be disclosed should normally not be made
D only in exhibits but must be referred to in the affidavits. D
(5) The fact that the non-disclosure is not deliberate but is
E innocent does not excuse the non-disclosure, but is a E
factor to take into account when the Court considers what
order to be made as a result of the non-disclosure.
F F
41. The petitioner maintained that her application for charging
G G
order is to enforce the arrears of CAD8,000 only. I take what she meant
H was the CAD8,000 was a distinct and separate matter and had nothing to H
do with the other parts of the settlement.
I I
J 42. I do not agree. It is clear that the CAD8,000 was part of the J
package and this CAD8,000 was to be reduced to CAD5,500 when
K K
$4,000,000 was fully paid. As mentioned above, whether the $4,000,000
L was fully paid was a live issue. L
M M
43. It is also clear that the payments by the respondent over all
N N
these years covered different items including the said CAD8,000 and
O those under the parties agreements post-2007 Consent Order. It is also O
significant to note that, as said above, the petitioner used the term
P P
“alimony” when referring to the said $10,000.
Q Q
44. In my judgment, the petitioner ought to have informed the
R R
court in the Supporting Affirmation that the landscape of parties’
S settlement had significantly changed and there were disputes that went to S
the core of the matter, ie if the respondent was in arrears. She should
T T
have disclosed all the relevant documents including the Homemade
U U
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A A
Agreement, her solicitors’ letter dated 14 January 2016 and the
B correspondences exchanged between the parties. All these are material B
facts that the court would need in the consideration of the petitioner’s ex
C C
parte application. If the petitioner had disclosed, the court would likely
D D
to have directed her to file more evidence.
E E
45. I find the petitioner failed in her duty to make a full and
F F
frank disclosure. In my assessment, it was not a mere inadvertence or
G oversight; the petitioner deliberately picked and chose those materials in G
her favour to portrait a very one-sided story.
H H
46. I acknowledge that the respondent has the burden to show
I I
cause why a charging order nisi should not be made absolute. In my view,
J this must be premised on the full and frank disclosure on the part of the J
K
petitioner in the first place. She should have put all the cards on the table K
for the court’s decision when considering if a charging order nisi was to
L L
be granted or not. If the court were satisfied with the petitioner’s case,
M then the respondent would have the burden to show cause. M
N N
47. I accept that the respondent did not articulate his case in his
O Affirmation in Opposition. As said above, he just exhibited the O
documents and did not give any explanation. I must say it is not
P P
uncommon for litigants in person to have prepared their affirmations in
Q this manner. The Affirmation in Opposition and the Affirmation in Reply Q
were not substantial by any standard. The respondent’s Affirmation was
R R
just 7 pages and the petitioner’s was 8 pages. While a master may not be
S able to go into the minute details in a 15-minute hearing, a quick reading S
of the Affirmations (especially the Homemade Agreement adduced by the
T T
U U
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A A
respondent) would have alerted the master that the story was not as
B straight forward as the petitioner might wish the court to know. B
C C
Decisions
D 48. For the above reasons, the master’s decision to grant the D
E
Charging Order Absolute must be set aside and the Charging Order E
Absolute be discharged; and I so order. The next question is if the
F F
Charging Order Nisi is to be discharged, too.
G G
49. In the context of charging order, the court is enjoined to
H consider all the circumstances of the case: see [26] above. While the H
court has a discretion not to discharge (or to re-grant) notwithstanding the
I I
material non-disclosure, it has been said such discretion should be
J sparingly exercised: see Tsui Yun Bun Barry v Law Wan Tung (formerly J
K
known as Law Siu Yi Biby) and Erwiana Sulistyaningsih, supra, at [54], K
citing Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642
L L
in the context of a Mareva injunction.
M M
50. I have given careful consideration on whether the present
N N
proceeding is to be allowed to continue with directions for parties to
O adduce further evidence. This is Ms Lee’s suggestion. I have considered O
all the circumstances of this case, including the disputes between the
P P
parties and the petitioner’s litigation misconduct regarding full and frank
Q disclosure, and decided not to do. To allow the petitioner to keep the Q
charging order nisi is to allow her to jump the gun and, in essence, to
R R
endorse her litigation misconduct. I have great doubt if the master would
S have granted the order nisi in the very first place if she had been alerted S
of the disputes between the parties. Accordingly, I make an order that the
T T
charging order nisi be discharged. I have to make it clear that the
U U
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A A
discharge is without prejudice to the petitioner’s taking out further
B appropriate application, including another Charging Order proceeding in B
the future.
C C
D D
51. Where a charging order is discharged, any order registered
E
under the Land Registration Ordinance (Cap 128) should be cancelled: E
Para 59/9A/14 of the Hong Kong Civil Procedure (2024) and Section
F F
52AB(4) & (5), District Court Ordinance (Cap 336). I order that the
G petitioner do, at her own costs, vacate the registration of the charging G
order nisi and the charging order absolute within 21 days.
H H
Costs
I I
52. The respondent succeeds in his appeal. I see no reason why
J costs should not follow the event. This means the petitioner has to pay J
the respondent’s costs. The respondent is acting in person. I consider it is
K K
appropriate for his costs to be assessed by way of summary assessment.
L He appeared in court twice with a simple affirmation filed. I summarily L
assess his costs at $3,000, to be payable forthwith by the petitioner. This
M M
order is an order nisi.
N N
O O
P (I. Wong) P
District Judge
Q Q
Ms Christie Y.Y. LEE instructed by Huen & Cheung, appeared for the
R Petitioner, and the Petitioner being excused in the hearing R
The Respondent, in person
S S
T T
U U
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A A
FCMC 12188 / 2006
[2024] HKFC 207 B
B
C IN THE DISTRICT COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D D
MATRIMONIAL CAUSES
E
NO. 12188 OF 2006 E
F ---------------------------- F
G G
BETWEEN
H H
HYCJ The Petitioner
I I
J and J
K K
LCSJ The Respondent
L L
---------------------------
M M
Coram: His Honour Judge I Wong in Chambers (Not Open to Public)
N N
Date of Hearing: 30 August 2024
Date of Judgment: 19 November 2024 O
O
P __________________ P
Q JUDGMENT Q
( Appeal against Master’s decisions – Charging Order Absolute )
R R
__________________
S S
T T
U U
V V
-2-
A A
1. This is an appeal against a master’s decision to grant a
B charging order absolute against the respondent’s property at Mei Foo Sun B
Chuen (“the respondent’s property”).
C C
D D
Background
E
2. The petitioner was the wife and the respondent the husband E
in these matrimonial proceedings. Since the parties have long ceased to
F F
be married, I shall address them as the petitioner and the respondent in
G this Judgment. G
H H
3. The parties married in July 1992. This was a childless
I marriage. I
J J
4. In September 2006, the petitioner petitioned for divorce on
K the ground of two years separation. K
L L
5. At all material times (before the divorce and up to now) the
M petitioner has been living in Canada and the respondent has been living in M
N
Hong Kong.
N
O O
6. The divorce proceedings were uneventful and went smoothly.
P The parties soon arrived at a settlement over the financial matters as a P
result of which a consent summons dated 27 January 2007 was filed to
Q Q
court for endorsement.
R R
7. Decree nisi was granted on 28 March 2007. On the same
S S
day, a consent order on the terms of the consent summons was granted. I
T shall refer to this consent order as “the 2007 Consent Order”. T
U U
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A A
8. The decree nisi was made absolute on 22 June 2007.
B B
The 2007 Consent Order
C C
9. The essential terms of the 2007 Consent Order were that the
D D
respondent was to transfer two properties to the petitioner plus a
E
periodical maintenance of CAD 8,000 per month. E
F F
10. The first property, which I refer to as “the Belcher
G Property” in this Judgment, was owned by a Company that presumably G
was controlled by the respondent. The respondent undertook to procure
H H
his company to transfer the Belcher Property to the petitioner free of
I encumbrances on or before 31 December 2008, failing which the I
respondent was to pay her $8,500,000 forthwith.
J J
K 11. The second property was in the name of the respondent. I K
shall refer to this property as “the Broadway Property”. The respondent
L L
was to transfer the Broadway Property to the petitioner free of
M encumbrances no later than 60 days upon the making of the decree M
N
absolute.
N
O O
12. Despite containing a periodical maintenance order, the 2007
P Consent Order – following the consent summons - was expressed to be P
for full and final settlement between the parties.
Q Q
R The Petitioner’s Charging Order Proceeding R
13. Then more than 16 years later in December 2023, the parties
S S
appeared in court again. This time it was on the petitioner’s application
T for a charging order against the respondent’s property. T
U U
V V
-4-
A A
14. The application was made in the usual fashion by way of an
B ex-parte application supported by an affirmation dated 19 December 2023 B
(“the Supporting Affirmation”).
C C
D D
15. On 4 January 2024, a Charging Order Nisi was granted.
E
Thereafter, the parties duly exchanged their affirmations and appeared E
before a master on 18 July 2024 when the master granted a Charing Order
F F
Absolute. This Charging Order is the subject matter of the present
G appeal lodged by the respondent on 31 July 2024. G
H H
Master’s Appeal
I 16. It is trite that an appeal from a master’s decision to a judge in I
chambers is a de novo hearing, and the judge will deal with the matter in
J J
question as if it came before him or her for the first time: see Hong Kong
K Civil Procedure (2024) at para 58/1/2. K
L L
The Petitioner’s Supporting Affirmation
M 17. Probably due to the fact that the petitioner was living in M
N
Canada, her Supporting Affirmation for the ex-parte application was
N
made by her solicitor. The affirmation simply referred to the
O O
maintenance order of CAD8,000 per month under the 2007 Consent
P Order and said the maintenance in arrears had accrued up to CAD72,000 P
plus interest of CAD2,771.46, totalling CAD74,771.46 (or
Q Q
HK$435,763.59).
R R
The Respondent’s Affirmation in Opposition
S S
18. The respondent has been acting in person in the Charging
T Order proceeding. T
U U
V V
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A A
19. The respondent did not state any relevant facts on the
B Affirmation in Opposition. He just exhibited the following: B
C C
(1) An English homemade handwritten agreement (“the Homemade
D Agreement”) dated 6 July 2012 and signed between the D
E
petitioner and the respondent. E
F F
(2) Some correspondences between the parties spreading from 7
G December 2015 to 7 May 2024, containing various schedules G
prepared by the respondent setting out the payments made by
H H
him. The last one was an email dated 7 May 2024 written by the
I respondent to the petitioner in which he provided particulars of I
payment and claimed to have overpaid her CAD161,500.
J J
K The Petitioner’s Affirmation in Reply K
20. It was in the Affirmation in Reply that sets out the
L L
petitioner’s case. Her case can be briefly stated as follows.
M M
N
21. The petitioner said while the respondent did transfer the
N
Broadway Property to her pursuant to the 2007 Consent Order, due to the
O O
respondent’s financial difficulty, he failed to procure the transfer of the
P Belcher Property or pay the $8,500,000 instead. P
Q Q
22. Negotiations between the parties ensued; and they were able
R to come to some verbal agreements (“the Verbal Agreement”). It was R
agreed that the respondent would purchase another property for her
S S
instead of the Belcher Property. In addition, the respondent would pay her
T “compensation”. The compensation was originally agreed to be the rental T
of this new property but was later changed to a monthly sum of $10,000.
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B 23. Subsequently, a property referred to in this Judgment as “the B
Shan Shing Property” was purchased in December 2009 in substitute for
C C
the Belcher Property and the respondent started paying her compensation
D D
$10,000 monthly as from February 2010.
E E
24. It was not the end of the matter. What followed were
F F
apparently further negotiations, which resulted in another agreement that
G this time was reduced into writing. It was the Homemade Agreement G
exhibited by the respondent in the Affirmation in Opposition. It is
H H
necessary to set out the text of this agreement in full:
I I
J (DIVORCE CASE) J
Pending Settlement(s):
K K
1. HK$ 4,000,000.00 to be settled: -
A. Paid on July /06, 2012 HK$ 1M by S Chartered Cheque #
L 68XXXX L
B. To pay by end of Sept., 2012 HK$ 1M (Deposit into HSBC a/c
# 082XXXXXX-XXX)
M M
C. Starting from Aug/01, 2012, to pay HK$ 105,000.00 every 3
months.
N D. WILL Try to complete settlement of the Full Amount by June N
/30, 2013.
2. Monthly payment of C $8,000.00 to be reduced to C$ 5,500.00
O O
from July/01, 2013 onward.
P Agreed & confirmed by: -- P
____(Signed)__________ ___(Signed)_________
Q Q
(Name of Petitioner) (Name of Respondent)
July/06 2012 July/06 2012
R R
S S
T T
The Law and Practice regarding Charging Order
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25. The court has power to impose a charging order for securing
B the payment of any money due or to become due under a judgment or B
order of the court on a judgment debtor’s property specified in the order:
C C
section 52A(1), District Court Ordinance (Cap 336). The money due
D D
must be an ascertained sum: see Hong Kong Civil Procedure (2024), at
E
50/9A/19. E
F F
26. In deciding whether to make a charging order the court has
G to consider all the circumstances of the case and, in particular, any G
evidence before it as to –
H H
(a) the personal circumstances of the debtor; and
I (b) whether any other creditor of the debtor would be likely to be I
unduly prejudiced by the making of the order: section 52A(2),
J J
District Court Ordinance (Cap 336).
K K
27. The general principles governing the exercise of the
L L
discretion to make a charging order are summarized in para 50/9A/23 of
M the Hong Kong Civil Procedure (2024): M
N N
“1. The question whether a charging order nisi should be made
absolute is one for the discretion of the court.
O O
2. The burden of showing cause why a charging order nisi should not
be made absolute is on the judgment debtor.
P 3. For the purpose of the exercise of the court’s discretion there is, in P
general, no material difference between the making absolute of a
charging order nisi on the one hand and a garnishee order nisi on the
Q Q
other.
4. In exercising its discretion the court has both the right and the duty
R to take into account all the circumstances of a particular case, whether R
such circumstances arose before or after the making of the order nisi.
5. The court should so exercise its discretion as to do equity, so far as
S S
possible, to all the various parties involved, that is to say, the
judgment creditor, the judgment debtor and all other unsecured
T creditors. Cf Wardley v. Aik San Realty Ltd [1985] 2 H.K.C. 695 T
above.
(The above principles which were stated by Lord Brandon in Roberts
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-8-
A A
Petroleum Ltd v. Bernard Kenny Ltd [1982] 1 W.L.R. 301 ,
307; [1982] 1 All E.R. 685 at 690, CA are not affected by the reversal
B of that case by the House of Lords [1983] A.C. 192; [1983] 1 All E.R. B
564 .)
C 6. The liquidation of a company, whether by a resolution for voluntary C
winding up or by a compulsory order for winding up brings into
operation a statutory scheme for dealing with the company’s assets,
D and accordingly if such liquidation occurs after the making of the D
charging order nisi and before such order is made absolute, the court
E in its discretion will decline to make the charging order absolute, E
( Roberts Petroleum Ltd v. Bernard Kenny Ltd [1983] A.C.
192; [1983] 1 All E.R. 564 , HL, reversing [1982] 1 W.L.R.
F 301 ; [1982] 1 All E.R. 685 , CA on this last point…” F
G Discussion G
28. It is clear that even on the petitioner’s version there was the
H H
Verbal Agreement that departed from the original bargain in a material
I respect as contained in the 2007 Consent Order. By the time of the I
Homemade Agreement, the landscape of parties’ settlement had further
J J
changed in a significant way. The Belcher Property was long gone and
K replaced by the Shan Shing Property. The $8,500,000 and its payment K
date were gone and was replaced by $4,000,000; probably by the time
L L
when it was signed, the respondent had already settled $4,500,000. The
M M
remaining $4,000,000 was to be paid by instalments with a proviso that
N the respondent would “try to complete settlement of the full amount by 30 N
June 2013”.
O O
P 29. Significantly, there was no mention of the $10,000 P
compensation as alleged by the petitioner.
Q Q
R 30. Notwithstanding that there was an express date (ie 1 st July R
2013) on which the CAD8,000 was to be reduced to CAD5,500, it seems
S S
the parties agreed that it was only when the $4,000,000 had been paid in
T full that the CAD5,500 would come into effect. T
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31. It transpired that there were at least 3 disputes between the
B parties. B
C C
32. First, the petitioner claimed full payment has never been
D D
achieved. There is a letter dated 14 January 2016 sent by her then
E
solicitors to the respondent in which the petitioner said, out of the said E
$4,000,000, the respondent still owed her $130,000. It is worthy to note
F F
that this letter was exhibited in the Affirmation in Opposition and not by
G the petitioner. I shall return to this letter in the later part of this Judgment. G
H H
33. Subsequently, in response, there was a “Payment History”
I prepared by the respondent on 14 June 2019 where he set out the I
payments (42 payments in total) he had made from January 2016 to June
J J
2019 and claimed he had already paid the alleged arrears of $130,000.
K K
34. The petitioner did not (and does not) agree to the
L L
respondent’s stance. This is the first dispute.
M M
N
35. Second, there was a dispute that arose from parties’ different
N
stance regarding the nature of the said monthly sum of $10,000. The
O O
respondent seemed to be saying that this monthly sum went to the
P satisfaction of the $4,000,000 but the petitioner did not agree. It is to be P
recalled that the petitioner said in the Affirmation in Reply that it was for
Q Q
her “compensation”. On this, it struck me that in her email dated 6
R February 2015 to the respondent, the petitioner claimed the said $10,000 R
is part of the terms in the monthly “alimony”.
S S
T 36. There is a third dispute. The respondent said in his email T
dated 7 May 2024 to the petitioner that, according to his record, he had
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A A
overpaid CAD161,500. In support, he set out the particulars of payment
B and concluded that he did not owe the petitioner any money. He asked B
the petitioner to verify the records to which apparently she did not
C C
respond. Again, this email was adduced by the respondent.
D D
E
37. Ms Lee, counsel for the petitioner, fairly conceded that these E
disputes were live issues between the parties and the petitioner was aware
F F
of them before the taking out of the present Charging Order Proceeding.
G G
38. At this juncture, I need to turn to the relevant procedure.
H H
I 39. The procedure for obtaining a charging order is a two-stage I
process, namely:
J J
(1) obtaining a charging order nisi on an ex parte affidavit (rule
K 1(2)) and K
(2) the making of an order absolute on the further consideration of
L L
the matter (rule 3); see also Hong Kong Civil Procedure (2024)
M at 50/9A/12. M
N N
40. It is trite that on an ex parte application, an applicant (ie the
O O
petitioner in the present case) has a duty to make full and frank disclosure
P of the material facts. The relevant principles are summarized by P
Recorder Steward Wong SC at [45] of his Judgment in Tsui Yun Bun
Q Q
Barry v. Law Wan Tung [2019] HKCFI 2955:
R R
(1) Material facts are those which are material for the Court,
S when determining the ex parte application, to know and S
which are necessary to enable the Court to exercise its
discretion properly. Those are facts which should have
T T
been put in the scales by the ex parte Court, and not only
facts which are determinative one way or another.
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(2) Materiality is to be decided by the Court and not by the
applicant or his legal advisers.
B (3) The applicant has a duty to make proper enquiries before B
making the application and the duty of disclosure covers
C not only facts known to the applicant but facts which he C
would have known had he made such proper inquiries.
(4) The matter to be disclosed should normally not be made
D only in exhibits but must be referred to in the affidavits. D
(5) The fact that the non-disclosure is not deliberate but is
E innocent does not excuse the non-disclosure, but is a E
factor to take into account when the Court considers what
order to be made as a result of the non-disclosure.
F F
41. The petitioner maintained that her application for charging
G G
order is to enforce the arrears of CAD8,000 only. I take what she meant
H was the CAD8,000 was a distinct and separate matter and had nothing to H
do with the other parts of the settlement.
I I
J 42. I do not agree. It is clear that the CAD8,000 was part of the J
package and this CAD8,000 was to be reduced to CAD5,500 when
K K
$4,000,000 was fully paid. As mentioned above, whether the $4,000,000
L was fully paid was a live issue. L
M M
43. It is also clear that the payments by the respondent over all
N N
these years covered different items including the said CAD8,000 and
O those under the parties agreements post-2007 Consent Order. It is also O
significant to note that, as said above, the petitioner used the term
P P
“alimony” when referring to the said $10,000.
Q Q
44. In my judgment, the petitioner ought to have informed the
R R
court in the Supporting Affirmation that the landscape of parties’
S settlement had significantly changed and there were disputes that went to S
the core of the matter, ie if the respondent was in arrears. She should
T T
have disclosed all the relevant documents including the Homemade
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A A
Agreement, her solicitors’ letter dated 14 January 2016 and the
B correspondences exchanged between the parties. All these are material B
facts that the court would need in the consideration of the petitioner’s ex
C C
parte application. If the petitioner had disclosed, the court would likely
D D
to have directed her to file more evidence.
E E
45. I find the petitioner failed in her duty to make a full and
F F
frank disclosure. In my assessment, it was not a mere inadvertence or
G oversight; the petitioner deliberately picked and chose those materials in G
her favour to portrait a very one-sided story.
H H
46. I acknowledge that the respondent has the burden to show
I I
cause why a charging order nisi should not be made absolute. In my view,
J this must be premised on the full and frank disclosure on the part of the J
K
petitioner in the first place. She should have put all the cards on the table K
for the court’s decision when considering if a charging order nisi was to
L L
be granted or not. If the court were satisfied with the petitioner’s case,
M then the respondent would have the burden to show cause. M
N N
47. I accept that the respondent did not articulate his case in his
O Affirmation in Opposition. As said above, he just exhibited the O
documents and did not give any explanation. I must say it is not
P P
uncommon for litigants in person to have prepared their affirmations in
Q this manner. The Affirmation in Opposition and the Affirmation in Reply Q
were not substantial by any standard. The respondent’s Affirmation was
R R
just 7 pages and the petitioner’s was 8 pages. While a master may not be
S able to go into the minute details in a 15-minute hearing, a quick reading S
of the Affirmations (especially the Homemade Agreement adduced by the
T T
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respondent) would have alerted the master that the story was not as
B straight forward as the petitioner might wish the court to know. B
C C
Decisions
D 48. For the above reasons, the master’s decision to grant the D
E
Charging Order Absolute must be set aside and the Charging Order E
Absolute be discharged; and I so order. The next question is if the
F F
Charging Order Nisi is to be discharged, too.
G G
49. In the context of charging order, the court is enjoined to
H consider all the circumstances of the case: see [26] above. While the H
court has a discretion not to discharge (or to re-grant) notwithstanding the
I I
material non-disclosure, it has been said such discretion should be
J sparingly exercised: see Tsui Yun Bun Barry v Law Wan Tung (formerly J
K
known as Law Siu Yi Biby) and Erwiana Sulistyaningsih, supra, at [54], K
citing Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642
L L
in the context of a Mareva injunction.
M M
50. I have given careful consideration on whether the present
N N
proceeding is to be allowed to continue with directions for parties to
O adduce further evidence. This is Ms Lee’s suggestion. I have considered O
all the circumstances of this case, including the disputes between the
P P
parties and the petitioner’s litigation misconduct regarding full and frank
Q disclosure, and decided not to do. To allow the petitioner to keep the Q
charging order nisi is to allow her to jump the gun and, in essence, to
R R
endorse her litigation misconduct. I have great doubt if the master would
S have granted the order nisi in the very first place if she had been alerted S
of the disputes between the parties. Accordingly, I make an order that the
T T
charging order nisi be discharged. I have to make it clear that the
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A A
discharge is without prejudice to the petitioner’s taking out further
B appropriate application, including another Charging Order proceeding in B
the future.
C C
D D
51. Where a charging order is discharged, any order registered
E
under the Land Registration Ordinance (Cap 128) should be cancelled: E
Para 59/9A/14 of the Hong Kong Civil Procedure (2024) and Section
F F
52AB(4) & (5), District Court Ordinance (Cap 336). I order that the
G petitioner do, at her own costs, vacate the registration of the charging G
order nisi and the charging order absolute within 21 days.
H H
Costs
I I
52. The respondent succeeds in his appeal. I see no reason why
J costs should not follow the event. This means the petitioner has to pay J
the respondent’s costs. The respondent is acting in person. I consider it is
K K
appropriate for his costs to be assessed by way of summary assessment.
L He appeared in court twice with a simple affirmation filed. I summarily L
assess his costs at $3,000, to be payable forthwith by the petitioner. This
M M
order is an order nisi.
N N
O O
P (I. Wong) P
District Judge
Q Q
Ms Christie Y.Y. LEE instructed by Huen & Cheung, appeared for the
R Petitioner, and the Petitioner being excused in the hearing R
The Respondent, in person
S S
T T
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