FCMC10499/2018 V, RHM v. V, ES also known as B, ES - LawHero
FCMC10499/2018
家事法庭Her Honour Judge Sharon D. Melloy31/10/2019[2019] HKFC 279
FCMC10499/2018
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A A
FCMC 10499 / 2018
B [2019] HKFC 279 B
C IN THE DISTRICT COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D D
MATRIMONIAL CAUSES NO. 10499 OF 2018
E E
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F F
BETWEEN
G G
V, RHM Petitioner
H H
and
I V, ES Respondent I
also known as B, ES
J J
K ---------------------------- K
L L
Before: Her Honour Judge Sharon D. Melloy in Chambers (Not open to
M public) M
Dates of Trial: 22 and 23 January and 20 and 21 May 2019
N N
Date of closing submissions: 20 June 2019
O Date of replies: 27 June 2019 (Petitioner), 16 July 2019 (Respondent) O
Date of Judgment: 1 November 2019
P P
Q Q
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R R
JUDGMENT
S (Crossley application) S
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T T
U U
V V
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A A
Introduction
B B
1. This is a hearing to determine whether or not the Respondent
C wife can show cause as to why she should not be bound by the terms of a C
Consent Summons dated the 4 May 2017 (and filed in court on the 5 June
D D
2017) and subsequently amended by an Amended Consent Summons dated
E the 16 October 2017. The Petitioner husband asks for an order in terms E
of the Amended Consent Summons. The wife for her part asks that both
F F
consent summonses be set aside. She then requests that further directions
G be given with respect to ancillary relief. G
H H
2. In essence it is the wife’s case that both the original and
I Amended Consent summonses are fundamentally unfair and that given the I
J
circumstances within the family at that time and generally, she should not J
be bound by their terms. In addition, she alleges a material lack of
K K
disclosure on the part of the husband and she says that she was not given
L
detailed and appropriate legal advice prior to the signing of both L
summonses. Further, she accuses the husband’s lawyer of placing her
M M
inter alia, under undue psychological pressure at a time when she was also
N suffering from acute emotional stress. In her last affidavit dated the 20 N
July 2018 she summarizes her position as follows:
O O
65. I believe that the settlement stipulated in the Consent
P Summonses is unfair and unreasonable to me and the Children P
and that I was pressurized to agree to the deal under enormous
Q stress from my unique circumstances. In the circumstance I Q
humbly ask this court to set aside the Consent Summonses filed
on 5th June 2017 and 16th October 2017 respectively which are
R both unreasonable and unfair to me and the children, with cost be R
to me.
S S
3. Given the very high standard of living enjoyed by the parties
T T
during the course of the marriage the wife also says that the Amended
U U
V V
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A A
Consent Summons does not ensure a continuation of anything like the
B B
same standard of living going forward. There are also concerns that it
C does not appropriately provide for the children, particularly for the C
youngest child of the family, H, who will need intensive medical and other
D D
support for the rest of his life. This suggestion is vigorously opposed by
E the husband. E
F F
4. Issues were also raised during the hearing (although I accept
G that this did not form part of the original affidavit evidence) with respect to G
the drafting and the meaning of a number of the clauses in the Amended
H H
Consent Summons and ultimately its enforceability.
I I
J
5. The husband for his part maintains that the agreements were J
freely entered into by both of the parties after extensive negotiations,
K K
which led to the original Consent Summons being signed and then certain
L
terms being renegotiated and a further Amended Consent Summons being L
signed. He says that the parties wanted a friendly divorce and that they
M M
did not wish to spend a great deal of money on legal fees. He further says
N that the wife had received independent legal advice and that it was her free N
and informed choice to enter into the agreements as drafted. He says that
O O
the wife is a strong woman and that it is not possible to bully her or to
P place her under undue pressure as alleged. He accuses her of being P
fundamentally dishonest in the way in which she has presented her case,
Q Q
something that in turn she strongly denies.
R R
The law
S S
6. The law is not in dispute and both parties refer to many of the
T same cases in support of their respective positions, although the emphasis T
U U
V V
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A A
that is placed on those cases may differ to a degree. The central case
B B
from a Hong Kong perspective remains the Court of Final Appeals
C decision in SPH v SA (Forum and Marital Agreements) [2014] HKFLR C
286. Paragraphs 33 - 35 of SPH v SA are relevant and bear some repetition.
D D
These paragraphs also cite with approval paragraphs 68 – 73 of England’s
E landmark decision Radmacher v Granatino: E
F F
33. In particular, an agreement would carry full weight only
if each party had entered into it of his or her own free will,
G without undue influence or pressure, having all the G
information material to his or her decision to enter into
the agreement and intending that it should be effective to
H H
govern the financial consequences of the marriage
coming to an end; and the court should give effect to an
I agreement which was freely entered into by each party I
with a full appreciation of its implications unless in the
circumstances prevailing it would not be fair to hold the
J parties to the agreement. Enforcement of the agreement J
could be rendered unfair by the occurrence of
K contingencies unforeseen at the time of the agreement or K
where, in the circumstances prevailing at the time of
separation, one partner would be left in a predicament of
L real need while the other enjoyed a sufficiency. L
34. The particular matters which were stressed by the
M Supreme Court were these. The court when considering M
the grant of ancillary relief was not obliged to give effect
to nuptial agreements―whether they were ante-nuptial or
N N
post-nuptial. The parties could not, by agreement, oust
the jurisdiction of the court. The court must, however,
O give appropriate weight to such an agreement. But it O
was the court, and not any prior agreement between the
parties, that would determine the appropriate ancillary
P relief when a marriage came to an end, for that principle P
was embodied in the legislation. [2], [7].
Q 35. The Supreme Court said: Q
“68 If an ante-nuptial agreement, or indeed a
R post-nuptial agreement, is to carry full weight, R
both the husband and wife must enter into it of
their own free will, without undue influence or
S S
pressure, and informed of its implications. …
69 … the Court of Appeal was correct in principle to
T ask whether there was any material lack of T
U U
V V
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A A
disclosure, information or advice. Sound legal
B advice is obviously desirable, for this will ensure B
that a party understands the implications of the
agreement, and full disclosure of any assets
C C
owned by the other party may be necessary to
ensure this. But if it is clear that a party is fully
D aware of the implications of an ante-nuptial D
agreement and indifferent to detailed particulars
of the other party’s assets, there is no need to
E accord the agreement reduced weight because he E
or she is unaware of those particulars. What is
F important is that each party should have all the F
information that is material to his or her decision,
and that each party should intend that the
G agreement should govern the financial G
consequences of the marriage coming to an end.
H … H
71 … The first question will be whether any of the
I standard vitiating factors: duress, fraud or I
misrepresentation, is present. Even if the
agreement does not have contractual force, those
J factors will negate any effect the agreement might J
otherwise have. But unconscionable conduct
K such as undue pressure (falling short of duress) K
will also be likely to eliminate the weight to be
attached to the agreement, and other unworthy
L conduct, such as exploitation of a dominant L
position to secure an unfair advantage, would
reduce or eliminate it.
M M
72 The court may take into account a party’s
emotional state, and what pressures he or she was
N under to agree. But that again cannot be N
considered in isolation from what would have
O happened had he or she not been under those O
pressures. The circumstances of the parties at
the time of the agreement will be relevant.
P Those will include such matters as their age and P
maturity, whether either or both had been married
Q
or been in long-term relationships before. For
Q
such couples their experience of previous
relationships may explain the terms of the
R agreement, and may also show what they foresaw R
when they entered into the agreement. What
may not be easily foreseeable for less mature
S S
couples may well be in contemplation of more
mature couples. Another important factor may
T be whether the marriage would have gone ahead T
U U
V V
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A A
without an agreement, or without the terms which
B had been agreed. This may cut either way. B
73 If the terms of the agreement are unfair from the
C start, this will reduce its weight, although this C
question will be subsumed in practice in the
question of whether the agreement operates
D unfairly having regard to the circumstances D
prevailing at the time of the breakdown of the
E marriage.” E
F 7. The Hong Kong Court of Final Appeal added at paragraph 39 F
and 40
G G
The application of Radmacher v Granatino in Hong Kong
H 39. There have been signs of approval of Radmacher v H
Granatino in this court in LKW v DD [2010] HKEC 1727,
(2010) 13 HKCFAR 537 (per Ribero PJ at [53], [105],
I I
obiter since the appeal did not concern an ante-nuptial
agreement). In the view of this court, the principles
J enunciated in Radmacher v Granatino should also be J
regarded as the law in Hong Kong. In common with
the UK Supreme Court, we see no reason for
K distinguishing between ante-nuptial agreements and K
separation agreements.
L 40. As we have said, the Hong Kong Court of Appeal has L
already accepted in L v C [2007] 3 HKLRD 819 that the
M
old rule that agreements providing for future separation M
are contrary to public policy is obsolete, and we endorse
its judgment. We agree with the UK Supreme Court
N that this should not be restricted to separation agreements. N
None of the supposed distinctions between them can any
longer be supported, although we accept that there may
O O
be circumstances where it is appropriate to distinguish
between an ante-nuptial and a separation agreement. As
P the UK Supreme Court said (at [61]) the circumstances P
surrounding the agreement may be very different
dependent on the stage of the couple’s life together at
Q which it is concluded, but it is not right to proceed on the Q
premise that there will always be a significant difference
R between an ante-nuptial agreement and a separation R
agreement.
S S
8. In addition, Mr Pilbrow S.C for the wife has relied heavily on
T the restatement of the law by Mostyn J in Kremen v Agrest (2012) 2 FLR. T
U U
V V
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A A
As one might expect this is a rather eloquent restatement, which bears
B B
some repetition. Beginning at paragraph 72 Mostyn J states as follows:
C C
[72] In Radmacher (formerly Granatino) v Granatino [2010]
D UKSC 42, [2010] 3 FCR 583, [2011] 1 All ER 373 the Supreme D
Court gave definitive guidance as to the treatment of a nuptial
contract in proceedings for ancillary relief following a domestic
E divorce. The guidance contained in the judgment of the E
majority delivered by Lord Phillips can be summarised as
F follows: F
(i) The court should give effect to a nuptial agreement which
is freely entered into by each party with a full appreciation
G G
of its implications unless in the circumstances prevailing it
would not be fair to hold the parties to their agreement
H (para [75]). H
(ii) In determining whether an agreement has been ‘freely
I entered into by each party with a full appreciation of its I
implications’ there is no absolute black and white rule for
full disclosure or independent legal advice. Rather, the
J question is whether in the individual case there is a J
material lack of disclosure, information or advice. Each
K
party must have all the information that is material to his or K
her decision that the agreement should govern the financial
consequences of the marriage coming to an end. An
L absolute rule would only be necessary if the agreement L
were to be contractually binding, but this is not the case as
there is a safety-net of (un)fairness (para [69]).
M M
(iii) The presence of any of the standard vitiating factors of
duress, fraud or misrepresentation will negate any effect
N the agreement might otherwise have (para [71]). Further, N
unconscionable conduct such as undue pressure (falling
O short of duress) will likely eliminate the weight to be O
attached to the agreement (ibid). Other unworthy conduct,
such as exploitation of a dominant position to secure an
P unfair advantage, will reduce or eliminate the weight to be P
attached to the agreement (ibid). The court may take into
account a party’s emotional state, and what pressures he or
Q Q
she was under to agree, as well as their age and maturity,
and whether either or both had been married or been in
R long-term relationships before (para [72]). The court may R
take into account foreign elements to determine whether or
not the parties intended their agreement to be effective
S S
(para [74]).
(iv) In determining whether ‘in the circumstances prevailing it
T would not be fair to hold the parties to their agreement’: T
U U
V V
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A A
(a) The agreement cannot be allowed to prejudice the
B reasonable requirements of any children of the family B
(para [77]).
C (b) Respect should be accorded to the decision of a C
married couple as to the manner in which their
financial affairs should be regulated particularly where
D the agreement addresses existing circumstances and D
not merely the contingencies of an uncertain future
E (para [78]). This is likely to be so where the E
agreement seeks to protect pre-marital property (para
[79]). By contrast it is less likely to be so where the
F agreement leaves in the hands of one spouse rather F
than the other the most part of a fortune which each
spouse has played an equal role in their different ways
G G
in creating (para [80]). If the devotion of one partner
to looking after the family and the home has left the
H other free to accumulate wealth, it is likely to be unfair H
to hold the parties to an agreement that entitles the
latter to retain all that he or she has earned (para [81]).
I I
(c) It is likely to be unfair to hold the parties to an
agreement which leaves one spouse in a predicament
J of real need, while the other enjoys a sufficiency or J
more (para [81]). However, need may be interpreted
K as being that minimum amount required to keep a K
spouse from destitution. For example, if the claimant
spouse had been incapacitated in the course of the
L marriage, so that he or she was incapable of earning a L
living, this might well justify, in the interests of
fairness, not holding him or her to the full rigours of
M M
the ante-nuptial agreement (para [119]).”
[73] It seems to me that it will only be in an unusual case where
N it can be said that absent independent legal advice and full N
disclosure, a party can be taken to have freely entered into a
O marital agreement with a full appreciation of its implications. O
After all, almost every common law country that has legislated in
this field has as a key pre-condition these requirements as well as
P a safety-net where the agreement is judged to be ‘unfair’ (e.g. P
British Columbia) or ‘unjust’ (e.g. New Zealand) or
Q
‘unconscionable’ (e.g. Australia). It would surely have to be
Q
shown that the spouse, like Mr. Granatino, had a high degree of
financial and legal sophistication in order to have a full
R appreciation of what legal rights he or she is signing away. R
Equally, it seems to me that there would have to be clear
evidence of significant economic capacity on the part of the
S S
claimant spouse before the assessment of needs was suppressed
to that minimal level imposed on Mr. Granatino. There would
T surely have to be an equivalent finding to that in para. 119 viz T
U U
V V
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A A
‘on the evidence he is extremely able, and has added to his
B qualifications by pursuing a D Phil in biotechnology’. B
C C
9. Although I accept that the factual matrix in that case was very
D different from the situation here, nevertheless it seems to me that this D
restatement is helpful.
E E
F 10. Further Mr Pilbrow has also referred to a checklist of F
questions that was referred to in the earlier case of K v K (Ancillary Relief:
G G
Prenuptial Agreement) (2003) 1 FLR 120. Rather like the checklist that
H is sometimes referred to in Children’s cases, it is accepted that this H
checklist is not in any way binding on the court, but that practitioners and
I I
judges alike may find it helpful when considering cases of this nature.
J The checklist states as follows: J
K (1) Did she [the wife] understand the agreement? K
(2) Was she properly advised as to its terms?
L (3) Did the husband put her under any pressure to sign it? L
(4) Was there full disclosure?
M M
(5) Was the wife under any other pressure?
N (6) Did she willingly sign the agreement? N
(7) Did the husband exploit a dominant position, either
O financially or otherwise? O
(8) Was the agreement entered into in the knowledge that there
P would be a child? P
(9) Has any unforeseen circumstance arisen since the
Q agreement was made that would make it unjust to hold the Q
parties to it?
R R
(10) What does the agreement mean?
(11) Does the agreement preclude an order for periodical
S S
payments for the wife?
T T
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V V
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A A
(12) Are there any grounds for concluding that an injustice
B would be done by holding the parties to the terms of the B
agreement?
C (13) Is the agreement one of the circumstances of the case to be C
considered under s 25?
D D
(14) Does the entry into the agreement constitute conduct which
it would be inequitable to disregard under s 25(2)(g)?
E E
(15) Would I [the judge] be breaking new ground by holding the
wife to the capital terms of the agreement?
F F
(16) Would it be unjust to hold the parties to the maintenance
terms of the agreement?
G G
H 11. As will be seen, I have not in this instance gone through these H
questions mechanically when considering the facts in this case, but I have
I I
referred to the checklist from time to time during the course of my
J deliberations and I have found it helpful. J
K K
12. Further, given that this is a Crossley hearing, reference should
L L
also be made to the case of Crossley v Crossley [2008] 1FLR 1467. As
M
explained by Ms Rattigan for the Petitioner husband in her opening: M
N 37. There has accordingly been a marked shift by the Courts N
towards granting due weight to agreements that are both
procedurally and substantially fair as demonstrated by Crossley v
O O
Crossley [2008] 1 FLR 1467. In that case it was established
that the Court has the power, subject to its case management
P powers, to direct that the usual requirements for Form E’s and P
questionnaires be dispensed with and a party be required to show
cause as to why the nuptial agreement should not determine the
Q outcome of the matter as the Court has followed in the present Q
case. The present hearing is a Crossly hearing.
R R
This is also accepted. Initially the parties only filed limited Form E’s, as is
S S
envisaged by the Crossley protocol. Subsequently it is the husband’s case
T T
that he provided a great deal more disclosure at the request of the wife.
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V V
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A A
Nonetheless it remains the wife’s position that he has not made full and
B B
frank disclosure and that further information is needed before she can
C proceed. C
D D
The central issue
E 13. As indicated above then the central issue is whether or not the E
Respondent wife should be bound by both consent summonses and in
F F
particular the Amended Consent Summons dated the 16 October 2017. In
G coming to that decision reference should be made to the protocols G
identified in the case law set out above.
H H
I Background to the marriage I
J
14. Both parties set out the background to the marriage in their J
respective submissions. Mr Pilbrow says inter alia as follows:
K K
2. This Court is possibly aware of the history of this
L marriage as the matter has been before it on several L
occasions. In brief however:
(i) H is of Dutch origin but came to Hong Kong in
M M
1991. He set up a clothing business by the name
of FC Ltd (“F”) in 1993, in which he remains a
N 60% shareholder. This is his 3rd marriage and he N
has 2 children by those earlier marriages, who live
in Paris and Milan respectively.
O O
(ii) W was born in Australia of American parents.
Having spent early years in Korea and Hong
P Kong, she moved to USA after her parents’ P
divorce. She returned to Hong Kong in 2002,
Q when she started working for G (“G”). Q
(iii) Having met in 2002, the parties married in May
2004. According to W, the date of separation was
R R
in 2017. There are 3 children of the family
namely R (14 years), L (12 years) and H (9
S years). S
(iv) H suffered an asthma attack in 2010, due to the
T caring hospital’s failure properly to treat him. T
As a result, H now … ” suffers from Global
U U
V V
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A A
Developmental Delay from anoxic
B encephalopathy and cerebral endemic caused by B
severe asthma attack. He is non-verbal, still in
diapers and has severe behavioural issues and
C C
life-threatening Aerophagia, which constitutes the
need for the gastronomy tube and suffers 2-3
D seizures per hour.” (W’s Form E [B2/694].) D
Further, R has been disturbed by his parents’
E divorce, leading to him requiring psychological E
assistance after he threatened suicide upon
learning of this father's decision to separate.
F F
3. … The parties initially moved to Switzerland in 2011 but
returned briefly to Hong Kong in 2012 before moving to
G Phuket. In 2014, the family moved to Georgia, USA but G
in May 2015 returned to Switzerland, where W and the
children still reside. All moves by the family have
H H
essentially been driven by H’s health. Between
November 2016 and December 2017, H underwent
I multiple operations and hospitalizations as confirmed by I
the medical certificate given by the family’s doctor in
Verbier Dr. Popescu Dutruit dated 10th January 2019.
J As a result W also suffered great stress over this period as J
confirmed by Dr Katerina Rozakis, clinical social worker
K in the clinical note dated 14 January 2019 (annexed K
marked “C”).
4. It is apparent from the evidence that H maintained the
L L
family in a luxurious standard of living of the highest
degree, provided presumably by the success of F. In
M January 2017, H met and now lives in Hong Kong with a M
further lady and her daughter. A review of the expenses
he claims in his Form E ([B2/680-682]) indicates that he
N continues to maintain the same standard of living. N
O O
15. These basic facts do not appear to be disputed, although it is
P the husband’s case that the wife unilaterally decided to move back to P
Switzerland from Georgia. He also remains of the view that the best
Q Q
option for H is for him to be cared for on a full time basis at a school called
R X in Roswell, Georgia, USA. He also maintains that the family have R
been living significantly beyond their means for a very long time. With
S S
that in mind it is of note that the husband is now aged 62 and that he has
T had some health issues of his own including some heart problems and T
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A A
throat cancer which is now in remission. The wife for her part is now 45
B B
years of age. She also has some health issues which she believes to be
C stress induced. C
D D
16. In Ms Rattigan’s opening she explains in more depth some of
E the salient points leading up to the divorce, with particular reference to the E
parties’ finances, as follows:
F F
G 14. In order to meet expenses that were no longer being met G
by income the Petitioner sold the former matrimonial home in
Sai Kung, in October 2014 for HK$130 million. After paying
H off some HK$20 million in debt, HK$78 million (US$10 million) H
was transferred to Switzerland to fund the family’s high living
I expenses which had, as the Petitioner feared, become I
unsustainable.
15. In March 2015 the Respondent informed the Petitioner
J J
that she wanted a divorce. In February 2017, the Petitioner told
the Respondent that he also wanted a divorce. The Respondent
K informed the Petitioner that she had retained Ms. S of Withers to K
act for her, the Petitioner retained Mr. G to represent him in the
impending divorce proceedings. The Respondent also
L consulted lawyers in Switzerland. The parties began to L
negotiate with regard to trying to settle matters between them as
M amicably as possible. The Respondent had suggested mediation M
in Switzerland but this did not take place. Instead, the parties
negotiated directly, with the involvement of lawyers on both
N sides. N
16. One matter that was of great concern to the Petitioner
O was the fact that he had to pay high taxes in Switzerland as a O
result of holding a “Permit B” in order to live there when he was
not in fact doing so. As part of their negotiations the parties,
P P
therefore, took advice in Switzerland so that the Respondent
would be able to obtain her own permit to live there after the
Q divorce. Q
17. On the advice of his lawyers the Petitioner filed the
R Petition for divorce in Hong Kong on 12th April 2017 [A1/1]. R
The Respondent who was represented by Withers in Hong Kong
as well as her lawyers in Switzerland then filed a Form 4
S Acknowledgment of Service on 2nd May 2017 stating that she S
intended to defend the case on the basis of forum non conveniens
[A1/5-7].
T T
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A A
18. The parties continued to negotiate the terms of their
B financial settlement after the Petition was filed. This B
culminated in an agreement being reached (the “Consent
Agreement”) which was drafted as a Consent Summons and was
C C
duly signed by the Respondent on 4th May 2017. This was then
filed at Court on 5th June 2017 [A1/12] (the delay being caused
D as the Petitioner was travelling). The Consent Agreement D
specifically records the Respondent’s consent to Hong Kong
being the appropriate forum and jurisdiction, she had not
E instituted proceedings in Switzerland at any time prior to this. E
At the time of the Consent Summons being filed the Respondent
F was receiving legal advice from Withers in Hong Kong and from F
Vafadar Silviotti Zapelli in Switzerland.
19. After the Consent Summons was signed by the
G G
Respondent she filed a Notice to Act in Person on 29th May
2017 [A1/8].
H H
20. In July 2017, the Respondent informed the Petitioner that,
after having taken further tax advice in Switzerland, it would be
I more efficient for maintenance as agreed under the Consent I
Agreement to be paid by a lump sum.
J 21. This started a further course of negotiations between the J
Petitioner and Respondent whereby they agreed to amend the
Consent Agreement as requested by the Respondent. Both
K parties continued to receive legal advice through this process. K
22. On 16th October 2017 the Petitioner and Respondent
L signed an Amended Consent Summons (the “Amended Consent L
Agreement”) and this was filed at Court on 20th October 2017
[A1/24]. This provides for a financial settlement for the
M M
Respondent including property transfers and for hers and the
Children’s maintenance as set out in the Petitioner’s 4th Affidavit,
N under the terms of the Amended Consent Summons the N
Respondent would receive 10% of the net proceeds of F if sold.
It also provides for the Petitioner to pay for the Children’s
O insurance, health care, school fees and associate costs and to O
continue to cover all of H’s expenses over and above the agreed
P
maintenance payments. Currently, the Petitioner pays P
approximately HK$452,000 per month towards the Children’s
expenses which includes H’s ski therapy, regular therapy,
Q insurance premia and carer salaries [B2/660-691]. Q
23. Following the signing of the Amended Consent
R Agreement the Petitioner transferred a lump sum of CHF3 R
million (equivalent to HK$23.5 million) to the Respondent as
agreed.
S S
24. After the Amended Consent Summons was filed the
Registrar came back to the parties to say that there was a
T problem with the Petition because the Children were overseas. T
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A A
He required an amendment to the Petition to state this. The
B amendment was duly made by OLN but the Respondent refused B
to agree without stating why.
C 25. Unfortunately, after having received the CHF3 million C
into her account, the Respondent then sought to resile from the
Consent Agreements, she engaged new solicitors, Boase Cohen
D & Collins (“BCC”) to write to the Court on 23rd November 2017 D
asking that the Consent Summons at Court not to be made
E Orders. This letter came a day after OLN had written to the E
Registrar to ask that the Court made an Order in terms of the
Consent Summons dated 17th October 2017 [A1/78].
F F
26. The Petitioner was left with no alternative but to file a
Summons seeking to have the Consent Summonses made Orders
G of Court after negotiations between the parties failed. After the G
Petitioner had filed his original Summons of 9th February 2018
[A1/135], he was shocked to find out that the Respondent then
H H
made an application for injunctions and extensive discovery
against the Petitioner and F and also for interim maintenance for
I herself and the children in the Entremont Tribunal in Switzerland I
on 29th March 2018. She did so despite having received CHF3
million from the Petitioner for her and the Children pursuant to
J the Amended Consent Agreement. The Petitioner’s 3rd J
Affidavit sets out that he was not immediately served with these
K proceedings as rather than being sent to his lawyers, they were K
sent to the parties’ home in Switzerland where the Respondent
lives. Further, the Respondent had not informed the Swiss
L Court that there are proceedings currently underway in Hong L
Kong.
M 27. After extremely expensive proceedings in Switzerland M
the Swiss Courts ruled in favour of the Petitioner and stated that
matters should be dealt with by the Court in Hong Kong, …
N [A1/200]. N
28. The Court was informed at a hearing on 17th July 2018
O that the Respondent intended to proceed in Hong Kong for final O
orders in relation to the divorce and the Children. She also
P
stated that she was no longer going to agree to the divorce P
Petition as filed and agreed in the Consent Summons on the basis
of 2 years separation as she wanted to argue the date of
Q separation being later, no application had been made to file an Q
answer out of time as would be required. In order not to waste
further costs on this the Petitioner agreed to amend the Petition
R R
to be based on 1 year of separation (without prejudice to his
position on the date of separation as agreed by the parties in the
S first Petition). S
th
29. After the hearing on 17 July 2018 the Respondent
T changed solicitors and went back to Withers. T
U U
V V
由此
- 16 -
A A
30. Having been told at the hearing on 17th July 2018 that the
B Respondent was agreeing to jurisdiction in Hong Kong, the B
Court was further informed at the hearing on 26th September
2018 by the Respondent’s Senior Counsel that the Respondent
C C
would be discontinuing the proceedings that she had brought in
Switzerland.
D 31. Unfortunately, this was not the case, the Respondent has D
continued to pursue an appeal in Switzerland against the Court’s
E refusal to grant her interim financial relief in that jurisdiction E
(despite the fact that she was paid a considerable lump sum and
the Petitioner continues to meet the majority of the expenses).
F F
32. The Petitioner is very concerned about the Respondent’s
litigation conduct and the hemorrhaging of funds that should be
G used for the family. He is extremely worried that despite the G
parties having reached an agreement on the children and
financial arrangements the Petitioner seeks to resile from this at
H H
great cost to the family both financially and emotionally. As
stated above there are no agreed long-term plans for H other than
I the fact that the Petitioner will pay for him, and since these I
proceedings have started the Respondent has created all manner
of obstacles over the Petitioner having access with the Children.
J At the rate at which the Respondent is spending and given the J
extremely high legal costs there will simply be nothing left for
K the Children’s security. K
L L
17. As will be seen this version of events is not fully accepted by
M
the wife. In particular, she does not accept that she received detailed M
legal advice before signing the consent summonses. She also reiterated in
N N
her affidavits and in the witness box, that it was her firm belief that
O Switzerland and not Hong Kong was the most appropriate forum to deal O
with the divorce, as that is where both she and the children have been
P P
living. Similar to the husband she maintains that she is contesting this
Q application, primarily because she too is concerned about the financial Q
security of the children post-divorce.
R R
S 18. When asked in the witness box how he felt about the wife S
reneging on the Amended Consent summons after receiving the CHF3
T T
U U
V V
由此
- 17 -
A A
million that he had sent to her in accordance with his undertaking in that
B B
agreement the husband said that:
C C
How it makes me feel is I feel like I’m being tricked. I mean we
D talked for months about an agreement, we draw it up, we sign it. D
I wire the money to her account and I don’t know, maybe a few
days later she reneges on the whole thing. So how does that
E make me feel? And then since then we have spent, I don't E
know, I think, if we add up everything I spent on lawyers, I’ll be
F close to or over a million US dollars and she must be saying, F
“For what?” “For what?” To -- that money should have been
there for -- to pay for H and for the children and that money is
G gone now. So how can I plan anything? How can I be saying, G
“Okay, I’m doing this and this and this” while then all of a
sudden all the cards change and I’m sitting there with a huge cost
H H
and almost no money left?
I I
The issues
J J
Introduction
K
19. In considering this application I have attempted to break the K
matter down as set out below. I will discuss the various aspects of the
L L
case under these heads.
M M
Were the consent summonses entered into freely and with a full
N N
appreciation of their implications? In particular
O i) Was there a material lack of disclosure? Did the wife receive O
independent legal advice?
P P
ii) Was there any duress, or undue influence or pressure or any other
Q form of unconscionable conduct undertaken by the husband or the Q
husband’s lawyer against the wife?
R R
iii) What was the wife’s emotional state at the time? Was she under any
S other form of pressure to agree to the consent summonses? S
Would the circumstances prevailing at the time make it unfair to hold the
T T
parties to the consent summonses in any event? In particular
U U
V V
由此
- 18 -
A A
iv) Would the consent summonses potentially prejudice the reasonable
B B
requirements of the children, particularly H?
C v) Do the consent summonses potentially leave the wife in a C
predicament of “real need”?
D D
E Did the parties appreciate the implications of the consent summonses? E
Were some of the clauses enforceable as drafted in any event?
F F
G Are there grounds for concluding that an injustice would be done by G
holding the wife to the terms of the consent summonses?
H H
I Discussion I
J
Were the consent summonses entered into freely and with a full J
appreciation of their implications? In particular
K K
i) Was there a material lack of disclosure? Did the wife receive
L
independent legal advice? L
20. These two things are interconnected and were hotly contested
M M
during the trial. It is the husband’s case that the wife was fully aware of
N the financial circumstances of the family, that she sat in on meetings at N
banks and other financial institutions and that she had access to all relevant
O O
financial documents. However, what became clear during the course of
P the trial and from the affidavits filed, is that the wife only had a very basic P
and limited understanding of the parties’ financial situation. Further it is
Q Q
not disputed that there had not been “full disclosure” prior to the
R negotiations taking place. R
S S
21. It seems that the wife did not have detailed information or
T documentary evidence pertaining to many aspects of the parties’ finances. T
U U
V V
由此
- 19 -
A A
In particular, the husband was cross examined with respect to the net
B B
proceeds of sale from the former matrimonial home. As indicated above
C the property was sold for HK$130 million in 2014. Of that sum HK$20 C
million was used to pay off some accumulated debt. The husband says that
D D
he then transferred US$10 million or say c HK$80 million to Switzerland
E and that these funds were settled in family trusts. He further says that all of E
this money is now “gone” and that the wife is fully aware of the
F F
circumstances surrounding the situation. This is an enormous amount of
G money to simply disappear and I have no doubt that further disclosure in G
this respect will be necessary. In addition, he was asked about the
H H
remaining HK$30 million odd. In answer he merely retorted that
I everything can be seen from his accounts. Time will tell if this is true or I
J
not. Similarly, the wife did not have any detailed information relating to J
the husband’s company, F or to another smaller company subsequently set
K K
up by the husband.
L L
22. It also seems that the wife did not have copies of many bank
M M
and credit card statements. During her re-examination she confirmed that
N she did not have copies of the Hong Kong bank statements, even though N
these related to joint accounts or any of the credit card statements,
O O
although she had seen them when they were first received for payment. In
P addition, she said that of the Swiss bank account statements, she only had P
copies of what the husband had given her. It is of note that historically
Q Q
during the marriage, she would simply send in credit cards to the
R petitioners PA for payment. The husband acknowledged that the wife R
would generally spend between US$30,000 – US$40,000 per month on
S S
credit cards. He also accepted that this had been foolish and that he had
T never given the wife a budget or sought to curtail her credit card spending T
U U
V V
由此
- 20 -
A A
in any way, other than to complain about it. Both he and the wife
B B
acknowledged that she had only used the credit cards (i.e. a black Amex
C card, a Visa and a MasterCard) and that she did not have access to cash. In C
such circumstances I tend to accept that the wife had a fairly limited
D D
knowledge of the parties’ finances, especially in so far as their family
E expenses were concerned. She did know in broad terms about most of the E
visible assets, but not necessarily their values. The wife further explained
F F
that she realized in retrospect that she had only very limited information
G made available to her during the course of the negotiations, especially in so G
far as the family expenses were concerned and that in reality she was
H H
wholly unprepared for assessing the realistic needs of both herself and the
I children going forward. In her last affidavit dated the 20 July 2018 she I
J
reiterates this as follows: J
K 21. The Petitioner stopped paying me any maintenance for K
myself and the children since the transfer of the CHF 3 million
and stopped paying any bills. The CHF 3 million was supposed
L L
to be for the children’s maintenance only, not to cover other
expenses. However I was left with all the bills and the lawyers’
M expenses to pay which I had never done before. They were all M
used to be handled by the Petitioner’s secretary and paid by the
Petitioner directly. After the transfer of the CHF 3 million I
N was left with bills of utilities of the two properties in Switzerland N
and all living expenses to pay. I realize that the CHF 3 million
O is certainly insufficient even for the children’s maintenance O
alone, not to mention with all the other expenses. In fact it has
been running out fast. I feel cheated by the Petitioner as he was
P fully aware that the CHF 3 million is insufficient even for the P
children’s maintenance alone when he asked me the sign the
Amended Consent Summons.
Q Q
22. The CHF 3 million is, according to the Amended Consent
Summons, for the children only. There is no maintenance
R provision for me in the Amended Consent Summons. As I need R
to look after the Children I cannot work. Without maintenance
S it is simply impossible for me to survive. I will have to sell our S
home in V and H’s apartment and live on the proceeds. Under
the Amended Consent Summons I even had to pay the Petitioner
T half of the sale proceeds of the Chalet and in the meantime pay T
U U
V V
由此
- 21 -
A A
all the mortgages, tax and bills before the sale of the property!
B Even with the proceeds it is insufficient for me and the Children B
as we will still have to pay for accommodation.
C C
23. It was put to the husband during the cross examination that
D D
the wife had no realistic idea of how much money she would need going
E forward to support both herself and the children. Mr. Pilbrow suggested E
that she would need approximately HK$250,000 in order to meet essential
F F
expenses under the Amended Consent summons. (The wife herself had put
G this at a slightly lower figure of CHF20,000 per month inclusive of G
CHF5,000 per month for herself). At the time of the first tranche of the
H H
trial in January 2019, I was informed that the wife had already spent
I between CHF1.5 – 1.8 million of the lump sum of CHF3 million, although I
it was the husband’s case that most of this had not been spent on the
J J
children.
K K
L
24. It is true that the wife proceeded nonetheless to essentially L
negotiate her own agreement. She did so even though there had not been
M M
any disclosure and her lawyers, reputable firms in both Hong Kong and
N
Switzerland, had told her that they could not properly advise her unless N
there was “full disclosure”. This aspect of the case was also challenged
O O
by the husband who basically said that this could not be so. In particular,
P he pointed to bills paid by him to the wife’s lawyers, which went far P
beyond the US$5,000 allowed for in the consent summons.
Q Q
R 25. Ultimately however, I found the wife’s version of events on R
this point to be entirely credible. It seems to me unfathomable that a
S S
reputable family law firm would or could have behaved in any other way
T than as described. In such circumstances I accept that it would only have T
U U
V V
由此
- 22 -
A A
been possible for the law firms to provide the wife with very basic legal
B B
advice on the issue of ancillary relief, given that there had been practically
C no financial disclosure. Indeed, it is the wife’s evidence that she was told C
repeatedly that she would be entitled to 50% of the assets and maintenance
D D
for both herself and the children. I accept what she says in this respect.
E E
26. Mr Pilbrow S.C summarized the situation from the wife’s
F F
perspective in his closing as follows:
G G
(a) W has maintained throughout that she did not receive
H independent legal advice concerning the terms of the H
Amended Consent Summons. She confirms that she was
informed of her right to take advice albeit the sum of
I I
US$5000 provided by the terms of the Amended Consent
Summons suggest the offer to be limited. It is confirmed
J under her signature on the Amended Consent Summons that J
she acted in person. Messrs. Withers declined to
countersign the first Consent Summons in the manner that
K H’s advisers did, indicating that they could not do so since W K
was acting contrary to their advice and they had not
L explained the terms of the Consent Summons to her. L
(b) W was cross-examined at length concerning her claim to a
lack of independent legal advice mainly on the basis of the
M M
charges rendered by Withers and W’s Swiss lawyers, which
H met. Messrs. Withers came off the record when W filed a
N Notice the Act in Person on 25th May 2017. Messrs Boase N
Cohen & Collins did not come onto the record until 23rd
November 2017. W’s Swiss lawyers came off the record on
O 27th April 2017 and were re-instructed in January 2018. O
Withers however issued bills in May, August and October
P 2017. W confirmed that she received advice from Withers P
after the signing of the first consent summons but it was in
regard to what steps could be taken to set aside the Consent
Q Summons, including seeking an opinion from Richard Todd Q
Q.C. in that regard.
R (c) The review of the terms of the Amended Consent Summons R
made below must surely suggest that no competent lawyer
could have advised W. This, however, is also confirmed by
S S
W herself in contemporaneous correspondence with both H
and his advisers:
T T
U U
V V
由此
- 23 -
A A
(i) “there is no “ghost lawyer” .... E-mail W to OLN dated
B 13.9.17 (C3/1402) B
(ii) “... my last communication with S was quite rude. She
C was not pleased that I did not take her advice. I now C
understand why! Had I known that you and R [the
husband] would treat me this way and that this would
D turn into such a nightmare, I never would have let you D
pressure me into signing away my right to a lawyer.”
E E-mail W to H and OLN dated 14.9.17 (C311412) E
(iii) … you pressured me into signing away my rights to a
lawyer and now you are trying to pressure me into
F F
accepting something that in unacceptable. I have to
finally seek advice …
G G
Email W to OLN and H dated 6.10.17 - 10 days before
Amended Consent Summons signed (C3/1423)
H (vi) “... If you want to spend more on lawyers it will simply H
be deducted from what we have now”... email H to W
I dated 8.10.17 (C311436) I
(v) “I have a decision to make and I have to consider the
whole situation. I cannot be left in a mess. I was
J J
pressured into signing away my right to a lawyer and
now I have to deal with totally unprofessional and
K ridiculous emails from G. This whole process has K
been a disaster.”
L Email W to H dated 8th October 2017 (C3/1437) L
(vi) “.... and now.... you will spent the money we have left
M on lawyers and at the end you will find out what you M
did and end up with nothing. Wake up, E!!!!” Email
H to W 8.10.2017 (C3/1433)
N N
(vii) “... Enough R. I have tried everything on my own to
settle this with you on your terms. I acted on my own,
O not fully understanding everything with my O
situation .....”
P Email W to H 8.10.17 (C3/1440) P
It is clear from the above that up until the last minute before the
Q signing of the Amended Consent Summons on 16th October Q
2017, both W and H were negotiating between themselves and
W was doing so on her own, with H and his lawyer trying to
R make her feel she was being difficult and unrealistic with her R
requests. Indeed, W confirmed that she did not see the final
draft of the Amended Consent Summons until they were before
S S
the Notaire in V to sign the same. The bill from W’s Swiss
lawyers indicates that they ceased advising W in April 2017
T prior to the signing of the 1 st Consent Summons. It is apparent T
U U
V V
由此
- 24 -
A A
that both lawyers advised W that no agreement should be signed
B before full disclosure had been given. B
C C
I accept this to be the case. I also accept that this was an entirely
D appropriate stance for the wife’s lawyers to take in the circumstances. D
E E
ii) Was there any duress or undue influence or pressure or any other form
F of unconscionable conduct undertaken by the husband or the husband’s F
lawyers against the wife?
G G
iii) What was the wife’s emotional state at the time? Was she under any
H other form of pressure to agree to the consent summonses? H
27. I also accept that the wife was under extraordinary levels of
I I
stress and pressure at the time of the negotiations. It is of note that the first
J round also took place within a relatively short period of time (i.e. the J
petition was filed on the 12 April 2017 and the first consent summons was
K K
dated the 4 May 2017). Although the husband tries to paint a picture of a
L loveless and sexless relationship, which subsisted merely for the sake of L
the children and particularly for H, there can be no doubt that the parties
M M
certainly held themselves out to be a close and loving couple until shortly
N
before the wife discovered evidence of the husband’s infidelity in March N
O
2017. There is no doubt that this discovery was a considerable shock O
both to her and the elder children.
P P
Q
28. Further it is clear that H was extremely unwell during this Q
period and that he needed the wife’s constant attention. In April 2017 he
R R
began to have frequent brain seizures and between April – June 2017 he
S was hospitalized 6 times. As referred to above the original consent S
summons was signed on the 4 May 2017.
T T
U U
V V
由此
- 25 -
A A
29. In addition the wife had to cope with issues pertaining to the
B B
elder child R, her own health issues and her father’s ill health. The
C husband says that the wife is a strong woman and that she cannot be forced C
to do anything that she does not wish to do. Indeed, he suggests that the
D D
negotiations were driven by her. The wife for her part says that she felt
E under tremendous pressure to sign both consent summonses and that she E
just wanted the situation over. In her affidavit dated the 16 April 2018
F F
she further states as follows:
G G
75. The finalized draft amended consent summons was only
done and e-mail to R and the Notaire’s office to print and
H H
shown to me at the Notaire’s office in Switzerland by R. I
had not seen the final changes made by G until then. R
I came to Switzerland for only a few days just for this and I
arranged for the Second Consent Summons to be signed by
both himself and I. We went to the notary public together
J J
on 16th October 2017. I only got a sight of the finalized
draft amended consent summons on the day and had no
K opportunity to consider. The notary public read the draft K
and told me in the presence of R whether I would agree to
this as there is no maintenance for me. I had no one to go
L over the changes with me. I signed under immense L
pressure influence and duress, which the Notaire will
M
confirm. She kept asking R where was my lawyer M
through all of this and was I sure I wanted to sign. I did
not feel that I have a choice. I just wanted it to be over.
N N
76. I now regretted entering into the agreement too quickly
without thinking it through or asking for any financial
O disclosure. However at the time I just wanted to resolve O
this as soon as possible to avoid hefty legal bills and stress
from the proceedings so that I can just focus on the
P Children. Although I did not think his proposed P
maintenance for the Children was sufficient I agreed to it.
Q Q
I accept her version of events.
R R
30. This situation was also made worse by what can only be
S
described as the highly unprofessional conduct of the husband’s lawyer – S
T
Mr G, who the wife knew and respected. As indicated above she had T
U U
V V
由此
- 26 -
A A
previously worked with him on a charity – a children’s welfare scheme, for
B B
a short period of time, when she first returned to Hong Kong. Some of
C the e-mails written by Mr O to the wife were, with respect, quite C
extraordinary. There is a bullying tone to them and I accept that on
D D
occasion there was both undue pressure exerted by him and an attempt to
E exploit his dominant position against her more obvious weaker one. This E
sort of behaviour by a seasoned professional is clearly unacceptable. It is a
F F
matter for the wife whether she chooses to take this matter further.
G G
Would the circumstances prevailing at the time make it unfair to hold the
H H
parties to the consent summonses in any event? In particular
I iv) Would the consent summonses potentially prejudice the reasonable I
J
requirements of the children, particularly H? J
v) Do the consent summonses potentially leave the wife in a predicament of
K K
“real need”?
L
31. The husband is firmly of the view that the consent summonses L
are ultimately fair, given that under their terms he continues to be
M M
responsible for most of the children’s expenses, which are considerable.
N He does not accept the suggestion that there is any risk at all to the N
children, or indeed the wife, who he accuses of being greedy. In his 4th
O O
affidavit of the 14 August 2018 he comments as follows:
P P
4. Despite the wording of the Amended Consent Summons
stating that the lump sum payment of CHF3 million is
Q Q
intended only for the children’s maintenance, I wish to
clarify that the lump sum payment to E [the wife] was
R calculated on the basis of:- R
(1) 10 years of E’s monthly maintenance of CHF10,000
S and CHF10,000 per month for R, L and H’s S
maintenance in the total amount of CHF2.4million (i.e.
CHF20,000×12months×10years = CHF2.4 million);
T plus T
U U
V V
由此
- 27 -
A A
(2) CHF600,000 being E’s 50% share in the Phuket
B property. B
…
C 5. On top of the lump sum payment, it would was also agreed C
that E would receive the following: -
D a) 50% beneficial interest in Phuket Villa CHF500,000 D
P, E’s father’s residence which is
E currently legally held myself E
b) 50% of sale proceeds of the V Chalet CHF4,375,000
F c) H’s Apartment in V to be transferred CHF1,400,000 F
to E
G d) Boat in Switzerland CHF285,000 G
e) Porsche 911 GTS 2016 CHF150,000
H f) Porsche Cayenne S 2014 CHF40,000 H
g) Jeep 2016 CHF30,000
I I
h) 10% of the net sale proceeds of Unknown at this
Frontline stage
J J
Total CHF6,780,000
(equivalent to
K HK$52,884,000) K
L 6. Therefore, under the terms of the Amended Consent L
Summons, E is in fact receiving a total sum of CHF9,780,000,
M which is equivalent to HK$76,284,000 from me which does M
not include the personal assets she already has in her
possession which I estimate to be in the region of HK$6
N million. I am advised and verily believe that this represents N
a very generous settlement with E receiving over 50% of the
marital assets and the settlement covers her reasonable needs
O O
generously interpreted.
P P
32. There are a number of difficulties with this. Firstly, there is
Q Q
a concern that the wife may be left in a situation of real need,
R
comparatively speaking, in the event that she is unable to fund the R
expenses that she is deemed responsible for under the Amended Consent
S S
summons from the designated amount of CHF3 million. There is also a
T concern that she may not be able to support herself or to contribute T
U U
V V
由此
- 28 -
A A
towards the children’s expenses after these funds are spent given that she
B B
only has a limited earning capacity. Although the wife indicated during the
C trial that she hopes to return to work in due course, whether that is really C
feasible remains to be seen. In particular, she is keen to work for an
D D
organisation called M and/or to help to establish a neurodevelopment
E centre in Switzerland. It is also not clear how much she might realistically E
earn even if this opportunity became a reality, which currently seems
F F
doubtful. The husband has suggested that she could sell some assets,
G although as will be seen there may be some difficulty with this given the G
way in which the agreement has been drafted. It is of note that many of the
H H
assets referred to above are illiquid in any event.
I I
J
Did the parties appreciate the implications of the consent summonses? J
Were some of the clauses enforceable as drafted in any event?
K K
33. During the trial it became increasingly clear that many of the
L
terms of the consent summons were unclear and arguably unenforceable as L
drawn. Neither party seemed to know what was meant by many of them.
M M
Although this is not accepted by the husband in his closing submissions, it
N seems to me that given the evidence it is not really possible to draw any N
other conclusion. Ms Rattigan tried to suggest that the parties themselves
O O
knew what was meant by some of the terms, but this was not borne out by
P much of the oral evidence. Mr Pilbrow summarizes the position in his P
closing submission. I do not intend to go through all of the clauses that
Q Q
cause difficulty, but I have picked out the following three examples which
R give some idea of the magnitude of the problem: R
S Clause J S
J. AND UPON the Petitioner undertaking to the Respondent
T and to the Court that he shall be responsible for the T
payment of the Children of the Family’s education and
U U
V V
由此
- 29 -
A A
health care and associated costs up to and including
B university and he shall pay directly to the invoicing parties. B
All children expenses are to be pre-approved by the
Petitioner before his direct payment. In relation to H, all
C C
therapist, special schooling, domestic helpers and
anything he needs in his life will be paid by the Petitioner.
D All damages, if any, successfully claimed under the current D
lawsuit in relation to H will go towards reimbursement of
expenses paid so far in relation to H by the Petitioner and
E any balance will be offset towards H’s future requirements. E
F F
34. This is an undertaking by the husband. On the one hand he
G promises to be responsible for all of the essential expenses for the children G
and on the other he says that this must be done with his pre-approval. He
H H
also says that he will pay for “anything that H needs in life”. It is not clear
I what this means or how it might be interpreted going forward. I am told I
that there have already been difficulties with respect to some of the
J J
payments for H’s expenses, although this does seem to be limited to
K K
expenses related to what one might term non-essential items.
L L
Recital L
L. AND UPON the Petitioner and Respondent agreeing,
M acknowledging and confirming to each other that the M
property under the Petitioner’s sole name situated at Route
N du Golf XX, XXXX Verbier, Switzerland (“Verbier N
Chalet”) shall be transferred to the Respondent’s sole name
remain in the Petitioner’s sole name and she shall be
O responsible for the mortgage. The and Respondent shall O
be responsible for half of the running costs of the Verbier
Chalet upon transfer to her name. Upon the Petitioner’s
P P
Permit B being cancelled, the Respondent shall be
responsible for the property taxes for the Verbier Chalet.
Q upon the Petitioner’s Permit B being cacelled. The Verbier Q
shall be sold within and no later than three (3) years from
the date of this Consent Summons, with both the Petitioner
R and the Respondent having the option by agreement, to R
lengthen or shorten the time for sale of the Verbier Chalet.
S The sales proceeds from the Verbier Chalet shall be split S
equally (50/50) between the Petitioner and the Respondent
after payment of any tax, mortgage or other expenses.
T From the sales proceeds from the Verbier Chalet, the T
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A A
Respondent shall receive half the mortgage payments made
B on behalf of the Petitioner. save that the Petitioner shall B
pay property taxes on the Verbier Chalet for the first year.
In the event the Petitioner wishes to sell the Verbier Chalet
C C
after 2 years hereof, the Respondent shall receive half the
net sale proceeds after payment of any tax, mortgage or
D other expenses. The Respondent shall have reasonable D
access to the Verbier Chalet upon reasonable notice to the
Petitioner, and the Verbier Chalet can be rented out by the
E Peitioner during a certain period of the year to help cover E
costs.
F F
35. This is an agreement between the parties. It is not clear when
G G
this property is to be sold, or how either party could force a sale. In
H H
addition, if this is largely the only capital that will be available to the wife,
I
it is not clear if 50% of the net proceeds of sale, will be sufficient to I
rehouse both her and the children in the future. There is also a concern that
J J
the wife will not be able to meet all of the expenses listed i.e. the mortgage
K
and the other outgoings on the property once it has been transferred to her. K
L Recitals M, R and BB L
M. AND UPON the Petitioner and Respondent agreeing,
acknowledging and confirming to each other that the
M M
property under the Petitioner’s sol name situated at Villa
QXX/XX Moo X Layan Estate Cherngtalay Sub-district,
N Talang District, Phuket Province 8XXXX Thailand N
(“Phuket Villa Q”) shall remain at in the Petitioner’s sole
name and the Children of the Family and the Respondent
O can have access to the Phuket Villa Q upon reasonable O
notice to the Petitioner.
P … P
R. AND UPON the Petitioner and Respondent agreeing,
Q acknowledging and confirming to each other that in the Q
Petitioner’s event of death, the Verbier Chalet, H’s Verbier
apartment, the Phuket Villa Q, and the part owned by
R R
Respondent’s father’s Villa, Phuket Villa P in Phuket, shall
be inherited by the Respondent to hold in trust for the
S Children of the Family, R, L and H and the Petitioner shall S
execute a Will to such effect.
T … T
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A A
BB. AND UPON the Petitioner undertaking to the Respondent
B that he shall make arrangements in his Will that should he B
pass away before the Respondent, the Respondent shall
hold all the assets received by her in this Consent
C C
Summons in trust for the Children of the Family, R, L and
H.
D D
E
36. These are further agreements. There is much confusion E
surrounding their meaning and how they interface with each other. Mr
F F
Pilbrow explains it thus in his closing:
G G
(d) Recital M, Rand BB .... Phuket Villa Q is to be retained by
H, but subject, apparently, to the children’s right to have
H access to it. By recital R, however, H undertakes that H
Villa Q will, upon his death, be inherited by W to hold in
trust for the children. To secure such inheritance, H
I I
undertakes to execute a will to that effect! When this was
put to H in cross examination (A2/495.129), it became
J clear that he did not understand / appreciate the restrictions J
that were to be imposed by the terms of the Amended
Consent Summons on his ability to deal freely with Villa Q.
K As far as W is concerned, she clearly did not appreciate K
that H’s offer to execute a will did not carry the security
L she envisaged! Recital BB just adds to the confusion .... By L
this recital, H undertakes to make arrangements in his will
that, should he die before W, she shall hold all assets
M received by ‘her’ in this Consent Summons in trust for the M
children. Firstly, it clearly does not make sense for H to
deal with assets received by W in his will... .one must
N N
presume that the word “her” in recital BB is intended to
read “him”. This error is repeated in recital CC where the
O reference to “all assets received by him” should read “her”. O
If these recitals are to be read as presumably intended, it
P being clear that neither party knowing which of them is P
going to die first, both would seem to be limited from in
any manner dealing with any of the assets received by
Q him/her under the terms of the Amended Consent Q
Summons, as they may have to be held in trust for the
R
children! One wonders whether “all assets received by W” R
includes the sum of US$3m mentioned in Recital GG and
order 2, albeit W is purportedly to receive the same as
S “child maintenance”. Again what assets of H are to be S
included within the terminology of Recital BB? Is Villa Q
an asset that H has “received” by this Consent Summons?
T T
Villa Q is already in his name - indeed what assets is H “to
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A A
receive” by this Consent Summons, which H is, by will,
B under Recital BB, to pass to W in trust for the children? B
Perhaps that is the reason why Recital R is included to
ensure that villa Q is inherited by W in trust for the
C C
children....
To add further to the confusion arising from Recital R,
D there is mention that “in the event of H’s death, the part D
owned by W’s father’s Villa, Phuket Villa P, shall be
E inherited by W in trust for the children”. I presume the E
word “Villa” appearing after the words “Respondent’s
father’s” is otiose.... No part can have been owned by W’s
F father’s villa! If that is correct, I am unable to see what F
right H has to attempt to dispose by will of that part of
Villa P as is owned by W’s father. The part of Villa P as is
G G
beneficially owned by H, on the other hand, “shall” (by
Recital P above) be transferred to W in trust for the
H children ... but only “in the event of H’s death”. Certainly H
W understood that H’s beneficial share was to be
transferred to her, albeit in trust for the children rather than
I I
awaiting the death of H. Indeed, in the knowledge that,
sadly, W’s father has now died, one wonders how this
J might affect the arguments that have apparently already J
surfaced between the heirs to his estate, if the Amended
Consent Summons were to become an Order of this Court.
K K
L 37. Other difficulties exist with respect to the other Recitals. It L
was also a matter of concern that the husband believed that order 5 – i.e.
M M
that there be liberty to apply as to the implementation of the terms of the
N order, meant that the court could intervene and make good the obvious N
difficulties with respect to the way in which the agreement had been
O O
drafted. This was clarified during the trial.
P P
38. In conclusion it seems to me that this was a very poorly
Q Q
drafted document and one that would be almost impossible to enforce as it
R stands. Further it was clear that neither party fully understood the potential R
implications of many parts of it.
S S
T T
U U
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A A
Are there any grounds for concluding that an injustice would be done by
B B
holding the wife to the terms of the consent summonses?
C 39. It does not seem to me that the Amended consent summons C
was entered into freely or with a full appreciation of its implications. In
D D
particular, it is clear that there had been a material lack of disclosure,
E especially with respect to the family expenses and that the wife did not E
receive full legal advice before signing either document. I specifically
F F
accept that she did not receive advice on the consent summonses
G themselves. Further, although I would accept that the pressure that she was G
subjected to did not amount to duress, nevertheless she was placed under
H H
inappropriate pressure during the negotiation process. I am also conscious
I of the fact that the wife’s emotional state at the time was a cause for some I
J
concern given H’s situation at the time including the fact that he was in J
and out of hospital on a regular basis, especially during the period that the
K K
first consent summons was negotiated and signed. Although the husband
L
complains that the wife has used H’s condition unfairly, it nevertheless L
seems to me that this is a material factor to be taken into account.
M M
Ultimately I am also not convinced that the agreements are fair, although I
N am cognizant of the huge amount of money that has been spent on legal N
costs to date and the fact that if the husband comes up to proof on many
O O
aspects of the disclosure, that both parties will need to radically alter their
P lifestyles going forward. P
Q Q
Conclusion
R 40. Having considered all of the above, it is ordered that both the R
original consent summons dated the 4 May 2017 and the Amended
S S
Consent summons dated the 16 October 2017 be set aside. As rightly
T pointed out by Mr Pilbrow, this is not the sort of case that was anticipated T
U U
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A A
in Crossley, where truncated Form E’s were filed and the parties proceeded
B B
to bypass many of the normal rules relating to disclosure etc. Here it will
C be necessary for the parties to make full and frank disclosure of their C
financial situation and this is likely to go beyond the disclosure filed to
D D
date. Form E’s were filed in August 2018. Thus in the first instance it
E is further ordered that updated Form E’s shall be filed and exchanged E
within the next 42 days. There shall also be a further First Appointment
F F
on the 7 February 2020 at 9:30 am. I shall not order in the first instance
G that the parties do personally attend this hearing, although this will clearly G
become necessary as the case develops.
H H
I Costs I
J
41. I can see no reason why costs shall not follow the event in the J
normal way. Thus I shall make an order nisi to be made absolute in 28
K K
days’ time that the Petitioner husband shall pay the Respondent wife’s
L
costs on a party and party basis to be taxed if not agreed. There shall be L
certificate for counsel.
M M
N N
O ( Sharon D MELLOY ) O
District Judge
P P
Q Q
Ms. Mairead Rattigan instructed by Oldham Li & Nie for the Petitioner
R R
Mr. David Pilbrow S.C instructed by Withers for the Respondent
S S
T T
U U
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由此
A A
FCMC 10499 / 2018
B [2019] HKFC 279 B
C IN THE DISTRICT COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D D
MATRIMONIAL CAUSES NO. 10499 OF 2018
E E
----------------------------
F F
BETWEEN
G G
V, RHM Petitioner
H H
and
I V, ES Respondent I
also known as B, ES
J J
K ---------------------------- K
L L
Before: Her Honour Judge Sharon D. Melloy in Chambers (Not open to
M public) M
Dates of Trial: 22 and 23 January and 20 and 21 May 2019
N N
Date of closing submissions: 20 June 2019
O Date of replies: 27 June 2019 (Petitioner), 16 July 2019 (Respondent) O
Date of Judgment: 1 November 2019
P P
Q Q
----------------------------
R R
JUDGMENT
S (Crossley application) S
----------------------------
T T
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A A
Introduction
B B
1. This is a hearing to determine whether or not the Respondent
C wife can show cause as to why she should not be bound by the terms of a C
Consent Summons dated the 4 May 2017 (and filed in court on the 5 June
D D
2017) and subsequently amended by an Amended Consent Summons dated
E the 16 October 2017. The Petitioner husband asks for an order in terms E
of the Amended Consent Summons. The wife for her part asks that both
F F
consent summonses be set aside. She then requests that further directions
G be given with respect to ancillary relief. G
H H
2. In essence it is the wife’s case that both the original and
I Amended Consent summonses are fundamentally unfair and that given the I
J
circumstances within the family at that time and generally, she should not J
be bound by their terms. In addition, she alleges a material lack of
K K
disclosure on the part of the husband and she says that she was not given
L
detailed and appropriate legal advice prior to the signing of both L
summonses. Further, she accuses the husband’s lawyer of placing her
M M
inter alia, under undue psychological pressure at a time when she was also
N suffering from acute emotional stress. In her last affidavit dated the 20 N
July 2018 she summarizes her position as follows:
O O
65. I believe that the settlement stipulated in the Consent
P Summonses is unfair and unreasonable to me and the Children P
and that I was pressurized to agree to the deal under enormous
Q stress from my unique circumstances. In the circumstance I Q
humbly ask this court to set aside the Consent Summonses filed
on 5th June 2017 and 16th October 2017 respectively which are
R both unreasonable and unfair to me and the children, with cost be R
to me.
S S
3. Given the very high standard of living enjoyed by the parties
T T
during the course of the marriage the wife also says that the Amended
U U
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A A
Consent Summons does not ensure a continuation of anything like the
B B
same standard of living going forward. There are also concerns that it
C does not appropriately provide for the children, particularly for the C
youngest child of the family, H, who will need intensive medical and other
D D
support for the rest of his life. This suggestion is vigorously opposed by
E the husband. E
F F
4. Issues were also raised during the hearing (although I accept
G that this did not form part of the original affidavit evidence) with respect to G
the drafting and the meaning of a number of the clauses in the Amended
H H
Consent Summons and ultimately its enforceability.
I I
J
5. The husband for his part maintains that the agreements were J
freely entered into by both of the parties after extensive negotiations,
K K
which led to the original Consent Summons being signed and then certain
L
terms being renegotiated and a further Amended Consent Summons being L
signed. He says that the parties wanted a friendly divorce and that they
M M
did not wish to spend a great deal of money on legal fees. He further says
N that the wife had received independent legal advice and that it was her free N
and informed choice to enter into the agreements as drafted. He says that
O O
the wife is a strong woman and that it is not possible to bully her or to
P place her under undue pressure as alleged. He accuses her of being P
fundamentally dishonest in the way in which she has presented her case,
Q Q
something that in turn she strongly denies.
R R
The law
S S
6. The law is not in dispute and both parties refer to many of the
T same cases in support of their respective positions, although the emphasis T
U U
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A A
that is placed on those cases may differ to a degree. The central case
B B
from a Hong Kong perspective remains the Court of Final Appeals
C decision in SPH v SA (Forum and Marital Agreements) [2014] HKFLR C
286. Paragraphs 33 - 35 of SPH v SA are relevant and bear some repetition.
D D
These paragraphs also cite with approval paragraphs 68 – 73 of England’s
E landmark decision Radmacher v Granatino: E
F F
33. In particular, an agreement would carry full weight only
if each party had entered into it of his or her own free will,
G without undue influence or pressure, having all the G
information material to his or her decision to enter into
the agreement and intending that it should be effective to
H H
govern the financial consequences of the marriage
coming to an end; and the court should give effect to an
I agreement which was freely entered into by each party I
with a full appreciation of its implications unless in the
circumstances prevailing it would not be fair to hold the
J parties to the agreement. Enforcement of the agreement J
could be rendered unfair by the occurrence of
K contingencies unforeseen at the time of the agreement or K
where, in the circumstances prevailing at the time of
separation, one partner would be left in a predicament of
L real need while the other enjoyed a sufficiency. L
34. The particular matters which were stressed by the
M Supreme Court were these. The court when considering M
the grant of ancillary relief was not obliged to give effect
to nuptial agreements―whether they were ante-nuptial or
N N
post-nuptial. The parties could not, by agreement, oust
the jurisdiction of the court. The court must, however,
O give appropriate weight to such an agreement. But it O
was the court, and not any prior agreement between the
parties, that would determine the appropriate ancillary
P relief when a marriage came to an end, for that principle P
was embodied in the legislation. [2], [7].
Q 35. The Supreme Court said: Q
“68 If an ante-nuptial agreement, or indeed a
R post-nuptial agreement, is to carry full weight, R
both the husband and wife must enter into it of
their own free will, without undue influence or
S S
pressure, and informed of its implications. …
69 … the Court of Appeal was correct in principle to
T ask whether there was any material lack of T
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A A
disclosure, information or advice. Sound legal
B advice is obviously desirable, for this will ensure B
that a party understands the implications of the
agreement, and full disclosure of any assets
C C
owned by the other party may be necessary to
ensure this. But if it is clear that a party is fully
D aware of the implications of an ante-nuptial D
agreement and indifferent to detailed particulars
of the other party’s assets, there is no need to
E accord the agreement reduced weight because he E
or she is unaware of those particulars. What is
F important is that each party should have all the F
information that is material to his or her decision,
and that each party should intend that the
G agreement should govern the financial G
consequences of the marriage coming to an end.
H … H
71 … The first question will be whether any of the
I standard vitiating factors: duress, fraud or I
misrepresentation, is present. Even if the
agreement does not have contractual force, those
J factors will negate any effect the agreement might J
otherwise have. But unconscionable conduct
K such as undue pressure (falling short of duress) K
will also be likely to eliminate the weight to be
attached to the agreement, and other unworthy
L conduct, such as exploitation of a dominant L
position to secure an unfair advantage, would
reduce or eliminate it.
M M
72 The court may take into account a party’s
emotional state, and what pressures he or she was
N under to agree. But that again cannot be N
considered in isolation from what would have
O happened had he or she not been under those O
pressures. The circumstances of the parties at
the time of the agreement will be relevant.
P Those will include such matters as their age and P
maturity, whether either or both had been married
Q
or been in long-term relationships before. For
Q
such couples their experience of previous
relationships may explain the terms of the
R agreement, and may also show what they foresaw R
when they entered into the agreement. What
may not be easily foreseeable for less mature
S S
couples may well be in contemplation of more
mature couples. Another important factor may
T be whether the marriage would have gone ahead T
U U
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A A
without an agreement, or without the terms which
B had been agreed. This may cut either way. B
73 If the terms of the agreement are unfair from the
C start, this will reduce its weight, although this C
question will be subsumed in practice in the
question of whether the agreement operates
D unfairly having regard to the circumstances D
prevailing at the time of the breakdown of the
E marriage.” E
F 7. The Hong Kong Court of Final Appeal added at paragraph 39 F
and 40
G G
The application of Radmacher v Granatino in Hong Kong
H 39. There have been signs of approval of Radmacher v H
Granatino in this court in LKW v DD [2010] HKEC 1727,
(2010) 13 HKCFAR 537 (per Ribero PJ at [53], [105],
I I
obiter since the appeal did not concern an ante-nuptial
agreement). In the view of this court, the principles
J enunciated in Radmacher v Granatino should also be J
regarded as the law in Hong Kong. In common with
the UK Supreme Court, we see no reason for
K distinguishing between ante-nuptial agreements and K
separation agreements.
L 40. As we have said, the Hong Kong Court of Appeal has L
already accepted in L v C [2007] 3 HKLRD 819 that the
M
old rule that agreements providing for future separation M
are contrary to public policy is obsolete, and we endorse
its judgment. We agree with the UK Supreme Court
N that this should not be restricted to separation agreements. N
None of the supposed distinctions between them can any
longer be supported, although we accept that there may
O O
be circumstances where it is appropriate to distinguish
between an ante-nuptial and a separation agreement. As
P the UK Supreme Court said (at [61]) the circumstances P
surrounding the agreement may be very different
dependent on the stage of the couple’s life together at
Q which it is concluded, but it is not right to proceed on the Q
premise that there will always be a significant difference
R between an ante-nuptial agreement and a separation R
agreement.
S S
8. In addition, Mr Pilbrow S.C for the wife has relied heavily on
T the restatement of the law by Mostyn J in Kremen v Agrest (2012) 2 FLR. T
U U
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由此
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A A
As one might expect this is a rather eloquent restatement, which bears
B B
some repetition. Beginning at paragraph 72 Mostyn J states as follows:
C C
[72] In Radmacher (formerly Granatino) v Granatino [2010]
D UKSC 42, [2010] 3 FCR 583, [2011] 1 All ER 373 the Supreme D
Court gave definitive guidance as to the treatment of a nuptial
contract in proceedings for ancillary relief following a domestic
E divorce. The guidance contained in the judgment of the E
majority delivered by Lord Phillips can be summarised as
F follows: F
(i) The court should give effect to a nuptial agreement which
is freely entered into by each party with a full appreciation
G G
of its implications unless in the circumstances prevailing it
would not be fair to hold the parties to their agreement
H (para [75]). H
(ii) In determining whether an agreement has been ‘freely
I entered into by each party with a full appreciation of its I
implications’ there is no absolute black and white rule for
full disclosure or independent legal advice. Rather, the
J question is whether in the individual case there is a J
material lack of disclosure, information or advice. Each
K
party must have all the information that is material to his or K
her decision that the agreement should govern the financial
consequences of the marriage coming to an end. An
L absolute rule would only be necessary if the agreement L
were to be contractually binding, but this is not the case as
there is a safety-net of (un)fairness (para [69]).
M M
(iii) The presence of any of the standard vitiating factors of
duress, fraud or misrepresentation will negate any effect
N the agreement might otherwise have (para [71]). Further, N
unconscionable conduct such as undue pressure (falling
O short of duress) will likely eliminate the weight to be O
attached to the agreement (ibid). Other unworthy conduct,
such as exploitation of a dominant position to secure an
P unfair advantage, will reduce or eliminate the weight to be P
attached to the agreement (ibid). The court may take into
account a party’s emotional state, and what pressures he or
Q Q
she was under to agree, as well as their age and maturity,
and whether either or both had been married or been in
R long-term relationships before (para [72]). The court may R
take into account foreign elements to determine whether or
not the parties intended their agreement to be effective
S S
(para [74]).
(iv) In determining whether ‘in the circumstances prevailing it
T would not be fair to hold the parties to their agreement’: T
U U
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A A
(a) The agreement cannot be allowed to prejudice the
B reasonable requirements of any children of the family B
(para [77]).
C (b) Respect should be accorded to the decision of a C
married couple as to the manner in which their
financial affairs should be regulated particularly where
D the agreement addresses existing circumstances and D
not merely the contingencies of an uncertain future
E (para [78]). This is likely to be so where the E
agreement seeks to protect pre-marital property (para
[79]). By contrast it is less likely to be so where the
F agreement leaves in the hands of one spouse rather F
than the other the most part of a fortune which each
spouse has played an equal role in their different ways
G G
in creating (para [80]). If the devotion of one partner
to looking after the family and the home has left the
H other free to accumulate wealth, it is likely to be unfair H
to hold the parties to an agreement that entitles the
latter to retain all that he or she has earned (para [81]).
I I
(c) It is likely to be unfair to hold the parties to an
agreement which leaves one spouse in a predicament
J of real need, while the other enjoys a sufficiency or J
more (para [81]). However, need may be interpreted
K as being that minimum amount required to keep a K
spouse from destitution. For example, if the claimant
spouse had been incapacitated in the course of the
L marriage, so that he or she was incapable of earning a L
living, this might well justify, in the interests of
fairness, not holding him or her to the full rigours of
M M
the ante-nuptial agreement (para [119]).”
[73] It seems to me that it will only be in an unusual case where
N it can be said that absent independent legal advice and full N
disclosure, a party can be taken to have freely entered into a
O marital agreement with a full appreciation of its implications. O
After all, almost every common law country that has legislated in
this field has as a key pre-condition these requirements as well as
P a safety-net where the agreement is judged to be ‘unfair’ (e.g. P
British Columbia) or ‘unjust’ (e.g. New Zealand) or
Q
‘unconscionable’ (e.g. Australia). It would surely have to be
Q
shown that the spouse, like Mr. Granatino, had a high degree of
financial and legal sophistication in order to have a full
R appreciation of what legal rights he or she is signing away. R
Equally, it seems to me that there would have to be clear
evidence of significant economic capacity on the part of the
S S
claimant spouse before the assessment of needs was suppressed
to that minimal level imposed on Mr. Granatino. There would
T surely have to be an equivalent finding to that in para. 119 viz T
U U
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A A
‘on the evidence he is extremely able, and has added to his
B qualifications by pursuing a D Phil in biotechnology’. B
C C
9. Although I accept that the factual matrix in that case was very
D different from the situation here, nevertheless it seems to me that this D
restatement is helpful.
E E
F 10. Further Mr Pilbrow has also referred to a checklist of F
questions that was referred to in the earlier case of K v K (Ancillary Relief:
G G
Prenuptial Agreement) (2003) 1 FLR 120. Rather like the checklist that
H is sometimes referred to in Children’s cases, it is accepted that this H
checklist is not in any way binding on the court, but that practitioners and
I I
judges alike may find it helpful when considering cases of this nature.
J The checklist states as follows: J
K (1) Did she [the wife] understand the agreement? K
(2) Was she properly advised as to its terms?
L (3) Did the husband put her under any pressure to sign it? L
(4) Was there full disclosure?
M M
(5) Was the wife under any other pressure?
N (6) Did she willingly sign the agreement? N
(7) Did the husband exploit a dominant position, either
O financially or otherwise? O
(8) Was the agreement entered into in the knowledge that there
P would be a child? P
(9) Has any unforeseen circumstance arisen since the
Q agreement was made that would make it unjust to hold the Q
parties to it?
R R
(10) What does the agreement mean?
(11) Does the agreement preclude an order for periodical
S S
payments for the wife?
T T
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A A
(12) Are there any grounds for concluding that an injustice
B would be done by holding the parties to the terms of the B
agreement?
C (13) Is the agreement one of the circumstances of the case to be C
considered under s 25?
D D
(14) Does the entry into the agreement constitute conduct which
it would be inequitable to disregard under s 25(2)(g)?
E E
(15) Would I [the judge] be breaking new ground by holding the
wife to the capital terms of the agreement?
F F
(16) Would it be unjust to hold the parties to the maintenance
terms of the agreement?
G G
H 11. As will be seen, I have not in this instance gone through these H
questions mechanically when considering the facts in this case, but I have
I I
referred to the checklist from time to time during the course of my
J deliberations and I have found it helpful. J
K K
12. Further, given that this is a Crossley hearing, reference should
L L
also be made to the case of Crossley v Crossley [2008] 1FLR 1467. As
M
explained by Ms Rattigan for the Petitioner husband in her opening: M
N 37. There has accordingly been a marked shift by the Courts N
towards granting due weight to agreements that are both
procedurally and substantially fair as demonstrated by Crossley v
O O
Crossley [2008] 1 FLR 1467. In that case it was established
that the Court has the power, subject to its case management
P powers, to direct that the usual requirements for Form E’s and P
questionnaires be dispensed with and a party be required to show
cause as to why the nuptial agreement should not determine the
Q outcome of the matter as the Court has followed in the present Q
case. The present hearing is a Crossly hearing.
R R
This is also accepted. Initially the parties only filed limited Form E’s, as is
S S
envisaged by the Crossley protocol. Subsequently it is the husband’s case
T T
that he provided a great deal more disclosure at the request of the wife.
U U
V V
由此
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A A
Nonetheless it remains the wife’s position that he has not made full and
B B
frank disclosure and that further information is needed before she can
C proceed. C
D D
The central issue
E 13. As indicated above then the central issue is whether or not the E
Respondent wife should be bound by both consent summonses and in
F F
particular the Amended Consent Summons dated the 16 October 2017. In
G coming to that decision reference should be made to the protocols G
identified in the case law set out above.
H H
I Background to the marriage I
J
14. Both parties set out the background to the marriage in their J
respective submissions. Mr Pilbrow says inter alia as follows:
K K
2. This Court is possibly aware of the history of this
L marriage as the matter has been before it on several L
occasions. In brief however:
(i) H is of Dutch origin but came to Hong Kong in
M M
1991. He set up a clothing business by the name
of FC Ltd (“F”) in 1993, in which he remains a
N 60% shareholder. This is his 3rd marriage and he N
has 2 children by those earlier marriages, who live
in Paris and Milan respectively.
O O
(ii) W was born in Australia of American parents.
Having spent early years in Korea and Hong
P Kong, she moved to USA after her parents’ P
divorce. She returned to Hong Kong in 2002,
Q when she started working for G (“G”). Q
(iii) Having met in 2002, the parties married in May
2004. According to W, the date of separation was
R R
in 2017. There are 3 children of the family
namely R (14 years), L (12 years) and H (9
S years). S
(iv) H suffered an asthma attack in 2010, due to the
T caring hospital’s failure properly to treat him. T
As a result, H now … ” suffers from Global
U U
V V
由此
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A A
Developmental Delay from anoxic
B encephalopathy and cerebral endemic caused by B
severe asthma attack. He is non-verbal, still in
diapers and has severe behavioural issues and
C C
life-threatening Aerophagia, which constitutes the
need for the gastronomy tube and suffers 2-3
D seizures per hour.” (W’s Form E [B2/694].) D
Further, R has been disturbed by his parents’
E divorce, leading to him requiring psychological E
assistance after he threatened suicide upon
learning of this father's decision to separate.
F F
3. … The parties initially moved to Switzerland in 2011 but
returned briefly to Hong Kong in 2012 before moving to
G Phuket. In 2014, the family moved to Georgia, USA but G
in May 2015 returned to Switzerland, where W and the
children still reside. All moves by the family have
H H
essentially been driven by H’s health. Between
November 2016 and December 2017, H underwent
I multiple operations and hospitalizations as confirmed by I
the medical certificate given by the family’s doctor in
Verbier Dr. Popescu Dutruit dated 10th January 2019.
J As a result W also suffered great stress over this period as J
confirmed by Dr Katerina Rozakis, clinical social worker
K in the clinical note dated 14 January 2019 (annexed K
marked “C”).
4. It is apparent from the evidence that H maintained the
L L
family in a luxurious standard of living of the highest
degree, provided presumably by the success of F. In
M January 2017, H met and now lives in Hong Kong with a M
further lady and her daughter. A review of the expenses
he claims in his Form E ([B2/680-682]) indicates that he
N continues to maintain the same standard of living. N
O O
15. These basic facts do not appear to be disputed, although it is
P the husband’s case that the wife unilaterally decided to move back to P
Switzerland from Georgia. He also remains of the view that the best
Q Q
option for H is for him to be cared for on a full time basis at a school called
R X in Roswell, Georgia, USA. He also maintains that the family have R
been living significantly beyond their means for a very long time. With
S S
that in mind it is of note that the husband is now aged 62 and that he has
T had some health issues of his own including some heart problems and T
U U
V V
由此
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A A
throat cancer which is now in remission. The wife for her part is now 45
B B
years of age. She also has some health issues which she believes to be
C stress induced. C
D D
16. In Ms Rattigan’s opening she explains in more depth some of
E the salient points leading up to the divorce, with particular reference to the E
parties’ finances, as follows:
F F
G 14. In order to meet expenses that were no longer being met G
by income the Petitioner sold the former matrimonial home in
Sai Kung, in October 2014 for HK$130 million. After paying
H off some HK$20 million in debt, HK$78 million (US$10 million) H
was transferred to Switzerland to fund the family’s high living
I expenses which had, as the Petitioner feared, become I
unsustainable.
15. In March 2015 the Respondent informed the Petitioner
J J
that she wanted a divorce. In February 2017, the Petitioner told
the Respondent that he also wanted a divorce. The Respondent
K informed the Petitioner that she had retained Ms. S of Withers to K
act for her, the Petitioner retained Mr. G to represent him in the
impending divorce proceedings. The Respondent also
L consulted lawyers in Switzerland. The parties began to L
negotiate with regard to trying to settle matters between them as
M amicably as possible. The Respondent had suggested mediation M
in Switzerland but this did not take place. Instead, the parties
negotiated directly, with the involvement of lawyers on both
N sides. N
16. One matter that was of great concern to the Petitioner
O was the fact that he had to pay high taxes in Switzerland as a O
result of holding a “Permit B” in order to live there when he was
not in fact doing so. As part of their negotiations the parties,
P P
therefore, took advice in Switzerland so that the Respondent
would be able to obtain her own permit to live there after the
Q divorce. Q
17. On the advice of his lawyers the Petitioner filed the
R Petition for divorce in Hong Kong on 12th April 2017 [A1/1]. R
The Respondent who was represented by Withers in Hong Kong
as well as her lawyers in Switzerland then filed a Form 4
S Acknowledgment of Service on 2nd May 2017 stating that she S
intended to defend the case on the basis of forum non conveniens
[A1/5-7].
T T
U U
V V
由此
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A A
18. The parties continued to negotiate the terms of their
B financial settlement after the Petition was filed. This B
culminated in an agreement being reached (the “Consent
Agreement”) which was drafted as a Consent Summons and was
C C
duly signed by the Respondent on 4th May 2017. This was then
filed at Court on 5th June 2017 [A1/12] (the delay being caused
D as the Petitioner was travelling). The Consent Agreement D
specifically records the Respondent’s consent to Hong Kong
being the appropriate forum and jurisdiction, she had not
E instituted proceedings in Switzerland at any time prior to this. E
At the time of the Consent Summons being filed the Respondent
F was receiving legal advice from Withers in Hong Kong and from F
Vafadar Silviotti Zapelli in Switzerland.
19. After the Consent Summons was signed by the
G G
Respondent she filed a Notice to Act in Person on 29th May
2017 [A1/8].
H H
20. In July 2017, the Respondent informed the Petitioner that,
after having taken further tax advice in Switzerland, it would be
I more efficient for maintenance as agreed under the Consent I
Agreement to be paid by a lump sum.
J 21. This started a further course of negotiations between the J
Petitioner and Respondent whereby they agreed to amend the
Consent Agreement as requested by the Respondent. Both
K parties continued to receive legal advice through this process. K
22. On 16th October 2017 the Petitioner and Respondent
L signed an Amended Consent Summons (the “Amended Consent L
Agreement”) and this was filed at Court on 20th October 2017
[A1/24]. This provides for a financial settlement for the
M M
Respondent including property transfers and for hers and the
Children’s maintenance as set out in the Petitioner’s 4th Affidavit,
N under the terms of the Amended Consent Summons the N
Respondent would receive 10% of the net proceeds of F if sold.
It also provides for the Petitioner to pay for the Children’s
O insurance, health care, school fees and associate costs and to O
continue to cover all of H’s expenses over and above the agreed
P
maintenance payments. Currently, the Petitioner pays P
approximately HK$452,000 per month towards the Children’s
expenses which includes H’s ski therapy, regular therapy,
Q insurance premia and carer salaries [B2/660-691]. Q
23. Following the signing of the Amended Consent
R Agreement the Petitioner transferred a lump sum of CHF3 R
million (equivalent to HK$23.5 million) to the Respondent as
agreed.
S S
24. After the Amended Consent Summons was filed the
Registrar came back to the parties to say that there was a
T problem with the Petition because the Children were overseas. T
U U
V V
由此
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A A
He required an amendment to the Petition to state this. The
B amendment was duly made by OLN but the Respondent refused B
to agree without stating why.
C 25. Unfortunately, after having received the CHF3 million C
into her account, the Respondent then sought to resile from the
Consent Agreements, she engaged new solicitors, Boase Cohen
D & Collins (“BCC”) to write to the Court on 23rd November 2017 D
asking that the Consent Summons at Court not to be made
E Orders. This letter came a day after OLN had written to the E
Registrar to ask that the Court made an Order in terms of the
Consent Summons dated 17th October 2017 [A1/78].
F F
26. The Petitioner was left with no alternative but to file a
Summons seeking to have the Consent Summonses made Orders
G of Court after negotiations between the parties failed. After the G
Petitioner had filed his original Summons of 9th February 2018
[A1/135], he was shocked to find out that the Respondent then
H H
made an application for injunctions and extensive discovery
against the Petitioner and F and also for interim maintenance for
I herself and the children in the Entremont Tribunal in Switzerland I
on 29th March 2018. She did so despite having received CHF3
million from the Petitioner for her and the Children pursuant to
J the Amended Consent Agreement. The Petitioner’s 3rd J
Affidavit sets out that he was not immediately served with these
K proceedings as rather than being sent to his lawyers, they were K
sent to the parties’ home in Switzerland where the Respondent
lives. Further, the Respondent had not informed the Swiss
L Court that there are proceedings currently underway in Hong L
Kong.
M 27. After extremely expensive proceedings in Switzerland M
the Swiss Courts ruled in favour of the Petitioner and stated that
matters should be dealt with by the Court in Hong Kong, …
N [A1/200]. N
28. The Court was informed at a hearing on 17th July 2018
O that the Respondent intended to proceed in Hong Kong for final O
orders in relation to the divorce and the Children. She also
P
stated that she was no longer going to agree to the divorce P
Petition as filed and agreed in the Consent Summons on the basis
of 2 years separation as she wanted to argue the date of
Q separation being later, no application had been made to file an Q
answer out of time as would be required. In order not to waste
further costs on this the Petitioner agreed to amend the Petition
R R
to be based on 1 year of separation (without prejudice to his
position on the date of separation as agreed by the parties in the
S first Petition). S
th
29. After the hearing on 17 July 2018 the Respondent
T changed solicitors and went back to Withers. T
U U
V V
由此
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A A
30. Having been told at the hearing on 17th July 2018 that the
B Respondent was agreeing to jurisdiction in Hong Kong, the B
Court was further informed at the hearing on 26th September
2018 by the Respondent’s Senior Counsel that the Respondent
C C
would be discontinuing the proceedings that she had brought in
Switzerland.
D 31. Unfortunately, this was not the case, the Respondent has D
continued to pursue an appeal in Switzerland against the Court’s
E refusal to grant her interim financial relief in that jurisdiction E
(despite the fact that she was paid a considerable lump sum and
the Petitioner continues to meet the majority of the expenses).
F F
32. The Petitioner is very concerned about the Respondent’s
litigation conduct and the hemorrhaging of funds that should be
G used for the family. He is extremely worried that despite the G
parties having reached an agreement on the children and
financial arrangements the Petitioner seeks to resile from this at
H H
great cost to the family both financially and emotionally. As
stated above there are no agreed long-term plans for H other than
I the fact that the Petitioner will pay for him, and since these I
proceedings have started the Respondent has created all manner
of obstacles over the Petitioner having access with the Children.
J At the rate at which the Respondent is spending and given the J
extremely high legal costs there will simply be nothing left for
K the Children’s security. K
L L
17. As will be seen this version of events is not fully accepted by
M
the wife. In particular, she does not accept that she received detailed M
legal advice before signing the consent summonses. She also reiterated in
N N
her affidavits and in the witness box, that it was her firm belief that
O Switzerland and not Hong Kong was the most appropriate forum to deal O
with the divorce, as that is where both she and the children have been
P P
living. Similar to the husband she maintains that she is contesting this
Q application, primarily because she too is concerned about the financial Q
security of the children post-divorce.
R R
S 18. When asked in the witness box how he felt about the wife S
reneging on the Amended Consent summons after receiving the CHF3
T T
U U
V V
由此
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A A
million that he had sent to her in accordance with his undertaking in that
B B
agreement the husband said that:
C C
How it makes me feel is I feel like I’m being tricked. I mean we
D talked for months about an agreement, we draw it up, we sign it. D
I wire the money to her account and I don’t know, maybe a few
days later she reneges on the whole thing. So how does that
E make me feel? And then since then we have spent, I don't E
know, I think, if we add up everything I spent on lawyers, I’ll be
F close to or over a million US dollars and she must be saying, F
“For what?” “For what?” To -- that money should have been
there for -- to pay for H and for the children and that money is
G gone now. So how can I plan anything? How can I be saying, G
“Okay, I’m doing this and this and this” while then all of a
sudden all the cards change and I’m sitting there with a huge cost
H H
and almost no money left?
I I
The issues
J J
Introduction
K
19. In considering this application I have attempted to break the K
matter down as set out below. I will discuss the various aspects of the
L L
case under these heads.
M M
Were the consent summonses entered into freely and with a full
N N
appreciation of their implications? In particular
O i) Was there a material lack of disclosure? Did the wife receive O
independent legal advice?
P P
ii) Was there any duress, or undue influence or pressure or any other
Q form of unconscionable conduct undertaken by the husband or the Q
husband’s lawyer against the wife?
R R
iii) What was the wife’s emotional state at the time? Was she under any
S other form of pressure to agree to the consent summonses? S
Would the circumstances prevailing at the time make it unfair to hold the
T T
parties to the consent summonses in any event? In particular
U U
V V
由此
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A A
iv) Would the consent summonses potentially prejudice the reasonable
B B
requirements of the children, particularly H?
C v) Do the consent summonses potentially leave the wife in a C
predicament of “real need”?
D D
E Did the parties appreciate the implications of the consent summonses? E
Were some of the clauses enforceable as drafted in any event?
F F
G Are there grounds for concluding that an injustice would be done by G
holding the wife to the terms of the consent summonses?
H H
I Discussion I
J
Were the consent summonses entered into freely and with a full J
appreciation of their implications? In particular
K K
i) Was there a material lack of disclosure? Did the wife receive
L
independent legal advice? L
20. These two things are interconnected and were hotly contested
M M
during the trial. It is the husband’s case that the wife was fully aware of
N the financial circumstances of the family, that she sat in on meetings at N
banks and other financial institutions and that she had access to all relevant
O O
financial documents. However, what became clear during the course of
P the trial and from the affidavits filed, is that the wife only had a very basic P
and limited understanding of the parties’ financial situation. Further it is
Q Q
not disputed that there had not been “full disclosure” prior to the
R negotiations taking place. R
S S
21. It seems that the wife did not have detailed information or
T documentary evidence pertaining to many aspects of the parties’ finances. T
U U
V V
由此
- 19 -
A A
In particular, the husband was cross examined with respect to the net
B B
proceeds of sale from the former matrimonial home. As indicated above
C the property was sold for HK$130 million in 2014. Of that sum HK$20 C
million was used to pay off some accumulated debt. The husband says that
D D
he then transferred US$10 million or say c HK$80 million to Switzerland
E and that these funds were settled in family trusts. He further says that all of E
this money is now “gone” and that the wife is fully aware of the
F F
circumstances surrounding the situation. This is an enormous amount of
G money to simply disappear and I have no doubt that further disclosure in G
this respect will be necessary. In addition, he was asked about the
H H
remaining HK$30 million odd. In answer he merely retorted that
I everything can be seen from his accounts. Time will tell if this is true or I
J
not. Similarly, the wife did not have any detailed information relating to J
the husband’s company, F or to another smaller company subsequently set
K K
up by the husband.
L L
22. It also seems that the wife did not have copies of many bank
M M
and credit card statements. During her re-examination she confirmed that
N she did not have copies of the Hong Kong bank statements, even though N
these related to joint accounts or any of the credit card statements,
O O
although she had seen them when they were first received for payment. In
P addition, she said that of the Swiss bank account statements, she only had P
copies of what the husband had given her. It is of note that historically
Q Q
during the marriage, she would simply send in credit cards to the
R petitioners PA for payment. The husband acknowledged that the wife R
would generally spend between US$30,000 – US$40,000 per month on
S S
credit cards. He also accepted that this had been foolish and that he had
T never given the wife a budget or sought to curtail her credit card spending T
U U
V V
由此
- 20 -
A A
in any way, other than to complain about it. Both he and the wife
B B
acknowledged that she had only used the credit cards (i.e. a black Amex
C card, a Visa and a MasterCard) and that she did not have access to cash. In C
such circumstances I tend to accept that the wife had a fairly limited
D D
knowledge of the parties’ finances, especially in so far as their family
E expenses were concerned. She did know in broad terms about most of the E
visible assets, but not necessarily their values. The wife further explained
F F
that she realized in retrospect that she had only very limited information
G made available to her during the course of the negotiations, especially in so G
far as the family expenses were concerned and that in reality she was
H H
wholly unprepared for assessing the realistic needs of both herself and the
I children going forward. In her last affidavit dated the 20 July 2018 she I
J
reiterates this as follows: J
K 21. The Petitioner stopped paying me any maintenance for K
myself and the children since the transfer of the CHF 3 million
and stopped paying any bills. The CHF 3 million was supposed
L L
to be for the children’s maintenance only, not to cover other
expenses. However I was left with all the bills and the lawyers’
M expenses to pay which I had never done before. They were all M
used to be handled by the Petitioner’s secretary and paid by the
Petitioner directly. After the transfer of the CHF 3 million I
N was left with bills of utilities of the two properties in Switzerland N
and all living expenses to pay. I realize that the CHF 3 million
O is certainly insufficient even for the children’s maintenance O
alone, not to mention with all the other expenses. In fact it has
been running out fast. I feel cheated by the Petitioner as he was
P fully aware that the CHF 3 million is insufficient even for the P
children’s maintenance alone when he asked me the sign the
Amended Consent Summons.
Q Q
22. The CHF 3 million is, according to the Amended Consent
Summons, for the children only. There is no maintenance
R provision for me in the Amended Consent Summons. As I need R
to look after the Children I cannot work. Without maintenance
S it is simply impossible for me to survive. I will have to sell our S
home in V and H’s apartment and live on the proceeds. Under
the Amended Consent Summons I even had to pay the Petitioner
T half of the sale proceeds of the Chalet and in the meantime pay T
U U
V V
由此
- 21 -
A A
all the mortgages, tax and bills before the sale of the property!
B Even with the proceeds it is insufficient for me and the Children B
as we will still have to pay for accommodation.
C C
23. It was put to the husband during the cross examination that
D D
the wife had no realistic idea of how much money she would need going
E forward to support both herself and the children. Mr. Pilbrow suggested E
that she would need approximately HK$250,000 in order to meet essential
F F
expenses under the Amended Consent summons. (The wife herself had put
G this at a slightly lower figure of CHF20,000 per month inclusive of G
CHF5,000 per month for herself). At the time of the first tranche of the
H H
trial in January 2019, I was informed that the wife had already spent
I between CHF1.5 – 1.8 million of the lump sum of CHF3 million, although I
it was the husband’s case that most of this had not been spent on the
J J
children.
K K
L
24. It is true that the wife proceeded nonetheless to essentially L
negotiate her own agreement. She did so even though there had not been
M M
any disclosure and her lawyers, reputable firms in both Hong Kong and
N
Switzerland, had told her that they could not properly advise her unless N
there was “full disclosure”. This aspect of the case was also challenged
O O
by the husband who basically said that this could not be so. In particular,
P he pointed to bills paid by him to the wife’s lawyers, which went far P
beyond the US$5,000 allowed for in the consent summons.
Q Q
R 25. Ultimately however, I found the wife’s version of events on R
this point to be entirely credible. It seems to me unfathomable that a
S S
reputable family law firm would or could have behaved in any other way
T than as described. In such circumstances I accept that it would only have T
U U
V V
由此
- 22 -
A A
been possible for the law firms to provide the wife with very basic legal
B B
advice on the issue of ancillary relief, given that there had been practically
C no financial disclosure. Indeed, it is the wife’s evidence that she was told C
repeatedly that she would be entitled to 50% of the assets and maintenance
D D
for both herself and the children. I accept what she says in this respect.
E E
26. Mr Pilbrow S.C summarized the situation from the wife’s
F F
perspective in his closing as follows:
G G
(a) W has maintained throughout that she did not receive
H independent legal advice concerning the terms of the H
Amended Consent Summons. She confirms that she was
informed of her right to take advice albeit the sum of
I I
US$5000 provided by the terms of the Amended Consent
Summons suggest the offer to be limited. It is confirmed
J under her signature on the Amended Consent Summons that J
she acted in person. Messrs. Withers declined to
countersign the first Consent Summons in the manner that
K H’s advisers did, indicating that they could not do so since W K
was acting contrary to their advice and they had not
L explained the terms of the Consent Summons to her. L
(b) W was cross-examined at length concerning her claim to a
lack of independent legal advice mainly on the basis of the
M M
charges rendered by Withers and W’s Swiss lawyers, which
H met. Messrs. Withers came off the record when W filed a
N Notice the Act in Person on 25th May 2017. Messrs Boase N
Cohen & Collins did not come onto the record until 23rd
November 2017. W’s Swiss lawyers came off the record on
O 27th April 2017 and were re-instructed in January 2018. O
Withers however issued bills in May, August and October
P 2017. W confirmed that she received advice from Withers P
after the signing of the first consent summons but it was in
regard to what steps could be taken to set aside the Consent
Q Summons, including seeking an opinion from Richard Todd Q
Q.C. in that regard.
R (c) The review of the terms of the Amended Consent Summons R
made below must surely suggest that no competent lawyer
could have advised W. This, however, is also confirmed by
S S
W herself in contemporaneous correspondence with both H
and his advisers:
T T
U U
V V
由此
- 23 -
A A
(i) “there is no “ghost lawyer” .... E-mail W to OLN dated
B 13.9.17 (C3/1402) B
(ii) “... my last communication with S was quite rude. She
C was not pleased that I did not take her advice. I now C
understand why! Had I known that you and R [the
husband] would treat me this way and that this would
D turn into such a nightmare, I never would have let you D
pressure me into signing away my right to a lawyer.”
E E-mail W to H and OLN dated 14.9.17 (C311412) E
(iii) … you pressured me into signing away my rights to a
lawyer and now you are trying to pressure me into
F F
accepting something that in unacceptable. I have to
finally seek advice …
G G
Email W to OLN and H dated 6.10.17 - 10 days before
Amended Consent Summons signed (C3/1423)
H (vi) “... If you want to spend more on lawyers it will simply H
be deducted from what we have now”... email H to W
I dated 8.10.17 (C311436) I
(v) “I have a decision to make and I have to consider the
whole situation. I cannot be left in a mess. I was
J J
pressured into signing away my right to a lawyer and
now I have to deal with totally unprofessional and
K ridiculous emails from G. This whole process has K
been a disaster.”
L Email W to H dated 8th October 2017 (C3/1437) L
(vi) “.... and now.... you will spent the money we have left
M on lawyers and at the end you will find out what you M
did and end up with nothing. Wake up, E!!!!” Email
H to W 8.10.2017 (C3/1433)
N N
(vii) “... Enough R. I have tried everything on my own to
settle this with you on your terms. I acted on my own,
O not fully understanding everything with my O
situation .....”
P Email W to H 8.10.17 (C3/1440) P
It is clear from the above that up until the last minute before the
Q signing of the Amended Consent Summons on 16th October Q
2017, both W and H were negotiating between themselves and
W was doing so on her own, with H and his lawyer trying to
R make her feel she was being difficult and unrealistic with her R
requests. Indeed, W confirmed that she did not see the final
draft of the Amended Consent Summons until they were before
S S
the Notaire in V to sign the same. The bill from W’s Swiss
lawyers indicates that they ceased advising W in April 2017
T prior to the signing of the 1 st Consent Summons. It is apparent T
U U
V V
由此
- 24 -
A A
that both lawyers advised W that no agreement should be signed
B before full disclosure had been given. B
C C
I accept this to be the case. I also accept that this was an entirely
D appropriate stance for the wife’s lawyers to take in the circumstances. D
E E
ii) Was there any duress or undue influence or pressure or any other form
F of unconscionable conduct undertaken by the husband or the husband’s F
lawyers against the wife?
G G
iii) What was the wife’s emotional state at the time? Was she under any
H other form of pressure to agree to the consent summonses? H
27. I also accept that the wife was under extraordinary levels of
I I
stress and pressure at the time of the negotiations. It is of note that the first
J round also took place within a relatively short period of time (i.e. the J
petition was filed on the 12 April 2017 and the first consent summons was
K K
dated the 4 May 2017). Although the husband tries to paint a picture of a
L loveless and sexless relationship, which subsisted merely for the sake of L
the children and particularly for H, there can be no doubt that the parties
M M
certainly held themselves out to be a close and loving couple until shortly
N
before the wife discovered evidence of the husband’s infidelity in March N
O
2017. There is no doubt that this discovery was a considerable shock O
both to her and the elder children.
P P
Q
28. Further it is clear that H was extremely unwell during this Q
period and that he needed the wife’s constant attention. In April 2017 he
R R
began to have frequent brain seizures and between April – June 2017 he
S was hospitalized 6 times. As referred to above the original consent S
summons was signed on the 4 May 2017.
T T
U U
V V
由此
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A A
29. In addition the wife had to cope with issues pertaining to the
B B
elder child R, her own health issues and her father’s ill health. The
C husband says that the wife is a strong woman and that she cannot be forced C
to do anything that she does not wish to do. Indeed, he suggests that the
D D
negotiations were driven by her. The wife for her part says that she felt
E under tremendous pressure to sign both consent summonses and that she E
just wanted the situation over. In her affidavit dated the 16 April 2018
F F
she further states as follows:
G G
75. The finalized draft amended consent summons was only
done and e-mail to R and the Notaire’s office to print and
H H
shown to me at the Notaire’s office in Switzerland by R. I
had not seen the final changes made by G until then. R
I came to Switzerland for only a few days just for this and I
arranged for the Second Consent Summons to be signed by
both himself and I. We went to the notary public together
J J
on 16th October 2017. I only got a sight of the finalized
draft amended consent summons on the day and had no
K opportunity to consider. The notary public read the draft K
and told me in the presence of R whether I would agree to
this as there is no maintenance for me. I had no one to go
L over the changes with me. I signed under immense L
pressure influence and duress, which the Notaire will
M
confirm. She kept asking R where was my lawyer M
through all of this and was I sure I wanted to sign. I did
not feel that I have a choice. I just wanted it to be over.
N N
76. I now regretted entering into the agreement too quickly
without thinking it through or asking for any financial
O disclosure. However at the time I just wanted to resolve O
this as soon as possible to avoid hefty legal bills and stress
from the proceedings so that I can just focus on the
P Children. Although I did not think his proposed P
maintenance for the Children was sufficient I agreed to it.
Q Q
I accept her version of events.
R R
30. This situation was also made worse by what can only be
S
described as the highly unprofessional conduct of the husband’s lawyer – S
T
Mr G, who the wife knew and respected. As indicated above she had T
U U
V V
由此
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A A
previously worked with him on a charity – a children’s welfare scheme, for
B B
a short period of time, when she first returned to Hong Kong. Some of
C the e-mails written by Mr O to the wife were, with respect, quite C
extraordinary. There is a bullying tone to them and I accept that on
D D
occasion there was both undue pressure exerted by him and an attempt to
E exploit his dominant position against her more obvious weaker one. This E
sort of behaviour by a seasoned professional is clearly unacceptable. It is a
F F
matter for the wife whether she chooses to take this matter further.
G G
Would the circumstances prevailing at the time make it unfair to hold the
H H
parties to the consent summonses in any event? In particular
I iv) Would the consent summonses potentially prejudice the reasonable I
J
requirements of the children, particularly H? J
v) Do the consent summonses potentially leave the wife in a predicament of
K K
“real need”?
L
31. The husband is firmly of the view that the consent summonses L
are ultimately fair, given that under their terms he continues to be
M M
responsible for most of the children’s expenses, which are considerable.
N He does not accept the suggestion that there is any risk at all to the N
children, or indeed the wife, who he accuses of being greedy. In his 4th
O O
affidavit of the 14 August 2018 he comments as follows:
P P
4. Despite the wording of the Amended Consent Summons
stating that the lump sum payment of CHF3 million is
Q Q
intended only for the children’s maintenance, I wish to
clarify that the lump sum payment to E [the wife] was
R calculated on the basis of:- R
(1) 10 years of E’s monthly maintenance of CHF10,000
S and CHF10,000 per month for R, L and H’s S
maintenance in the total amount of CHF2.4million (i.e.
CHF20,000×12months×10years = CHF2.4 million);
T plus T
U U
V V
由此
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A A
(2) CHF600,000 being E’s 50% share in the Phuket
B property. B
…
C 5. On top of the lump sum payment, it would was also agreed C
that E would receive the following: -
D a) 50% beneficial interest in Phuket Villa CHF500,000 D
P, E’s father’s residence which is
E currently legally held myself E
b) 50% of sale proceeds of the V Chalet CHF4,375,000
F c) H’s Apartment in V to be transferred CHF1,400,000 F
to E
G d) Boat in Switzerland CHF285,000 G
e) Porsche 911 GTS 2016 CHF150,000
H f) Porsche Cayenne S 2014 CHF40,000 H
g) Jeep 2016 CHF30,000
I I
h) 10% of the net sale proceeds of Unknown at this
Frontline stage
J J
Total CHF6,780,000
(equivalent to
K HK$52,884,000) K
L 6. Therefore, under the terms of the Amended Consent L
Summons, E is in fact receiving a total sum of CHF9,780,000,
M which is equivalent to HK$76,284,000 from me which does M
not include the personal assets she already has in her
possession which I estimate to be in the region of HK$6
N million. I am advised and verily believe that this represents N
a very generous settlement with E receiving over 50% of the
marital assets and the settlement covers her reasonable needs
O O
generously interpreted.
P P
32. There are a number of difficulties with this. Firstly, there is
Q Q
a concern that the wife may be left in a situation of real need,
R
comparatively speaking, in the event that she is unable to fund the R
expenses that she is deemed responsible for under the Amended Consent
S S
summons from the designated amount of CHF3 million. There is also a
T concern that she may not be able to support herself or to contribute T
U U
V V
由此
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A A
towards the children’s expenses after these funds are spent given that she
B B
only has a limited earning capacity. Although the wife indicated during the
C trial that she hopes to return to work in due course, whether that is really C
feasible remains to be seen. In particular, she is keen to work for an
D D
organisation called M and/or to help to establish a neurodevelopment
E centre in Switzerland. It is also not clear how much she might realistically E
earn even if this opportunity became a reality, which currently seems
F F
doubtful. The husband has suggested that she could sell some assets,
G although as will be seen there may be some difficulty with this given the G
way in which the agreement has been drafted. It is of note that many of the
H H
assets referred to above are illiquid in any event.
I I
J
Did the parties appreciate the implications of the consent summonses? J
Were some of the clauses enforceable as drafted in any event?
K K
33. During the trial it became increasingly clear that many of the
L
terms of the consent summons were unclear and arguably unenforceable as L
drawn. Neither party seemed to know what was meant by many of them.
M M
Although this is not accepted by the husband in his closing submissions, it
N seems to me that given the evidence it is not really possible to draw any N
other conclusion. Ms Rattigan tried to suggest that the parties themselves
O O
knew what was meant by some of the terms, but this was not borne out by
P much of the oral evidence. Mr Pilbrow summarizes the position in his P
closing submission. I do not intend to go through all of the clauses that
Q Q
cause difficulty, but I have picked out the following three examples which
R give some idea of the magnitude of the problem: R
S Clause J S
J. AND UPON the Petitioner undertaking to the Respondent
T and to the Court that he shall be responsible for the T
payment of the Children of the Family’s education and
U U
V V
由此
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A A
health care and associated costs up to and including
B university and he shall pay directly to the invoicing parties. B
All children expenses are to be pre-approved by the
Petitioner before his direct payment. In relation to H, all
C C
therapist, special schooling, domestic helpers and
anything he needs in his life will be paid by the Petitioner.
D All damages, if any, successfully claimed under the current D
lawsuit in relation to H will go towards reimbursement of
expenses paid so far in relation to H by the Petitioner and
E any balance will be offset towards H’s future requirements. E
F F
34. This is an undertaking by the husband. On the one hand he
G promises to be responsible for all of the essential expenses for the children G
and on the other he says that this must be done with his pre-approval. He
H H
also says that he will pay for “anything that H needs in life”. It is not clear
I what this means or how it might be interpreted going forward. I am told I
that there have already been difficulties with respect to some of the
J J
payments for H’s expenses, although this does seem to be limited to
K K
expenses related to what one might term non-essential items.
L L
Recital L
L. AND UPON the Petitioner and Respondent agreeing,
M acknowledging and confirming to each other that the M
property under the Petitioner’s sole name situated at Route
N du Golf XX, XXXX Verbier, Switzerland (“Verbier N
Chalet”) shall be transferred to the Respondent’s sole name
remain in the Petitioner’s sole name and she shall be
O responsible for the mortgage. The and Respondent shall O
be responsible for half of the running costs of the Verbier
Chalet upon transfer to her name. Upon the Petitioner’s
P P
Permit B being cancelled, the Respondent shall be
responsible for the property taxes for the Verbier Chalet.
Q upon the Petitioner’s Permit B being cacelled. The Verbier Q
shall be sold within and no later than three (3) years from
the date of this Consent Summons, with both the Petitioner
R and the Respondent having the option by agreement, to R
lengthen or shorten the time for sale of the Verbier Chalet.
S The sales proceeds from the Verbier Chalet shall be split S
equally (50/50) between the Petitioner and the Respondent
after payment of any tax, mortgage or other expenses.
T From the sales proceeds from the Verbier Chalet, the T
U U
V V
由此
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A A
Respondent shall receive half the mortgage payments made
B on behalf of the Petitioner. save that the Petitioner shall B
pay property taxes on the Verbier Chalet for the first year.
In the event the Petitioner wishes to sell the Verbier Chalet
C C
after 2 years hereof, the Respondent shall receive half the
net sale proceeds after payment of any tax, mortgage or
D other expenses. The Respondent shall have reasonable D
access to the Verbier Chalet upon reasonable notice to the
Petitioner, and the Verbier Chalet can be rented out by the
E Peitioner during a certain period of the year to help cover E
costs.
F F
35. This is an agreement between the parties. It is not clear when
G G
this property is to be sold, or how either party could force a sale. In
H H
addition, if this is largely the only capital that will be available to the wife,
I
it is not clear if 50% of the net proceeds of sale, will be sufficient to I
rehouse both her and the children in the future. There is also a concern that
J J
the wife will not be able to meet all of the expenses listed i.e. the mortgage
K
and the other outgoings on the property once it has been transferred to her. K
L Recitals M, R and BB L
M. AND UPON the Petitioner and Respondent agreeing,
acknowledging and confirming to each other that the
M M
property under the Petitioner’s sol name situated at Villa
QXX/XX Moo X Layan Estate Cherngtalay Sub-district,
N Talang District, Phuket Province 8XXXX Thailand N
(“Phuket Villa Q”) shall remain at in the Petitioner’s sole
name and the Children of the Family and the Respondent
O can have access to the Phuket Villa Q upon reasonable O
notice to the Petitioner.
P … P
R. AND UPON the Petitioner and Respondent agreeing,
Q acknowledging and confirming to each other that in the Q
Petitioner’s event of death, the Verbier Chalet, H’s Verbier
apartment, the Phuket Villa Q, and the part owned by
R R
Respondent’s father’s Villa, Phuket Villa P in Phuket, shall
be inherited by the Respondent to hold in trust for the
S Children of the Family, R, L and H and the Petitioner shall S
execute a Will to such effect.
T … T
U U
V V
由此
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A A
BB. AND UPON the Petitioner undertaking to the Respondent
B that he shall make arrangements in his Will that should he B
pass away before the Respondent, the Respondent shall
hold all the assets received by her in this Consent
C C
Summons in trust for the Children of the Family, R, L and
H.
D D
E
36. These are further agreements. There is much confusion E
surrounding their meaning and how they interface with each other. Mr
F F
Pilbrow explains it thus in his closing:
G G
(d) Recital M, Rand BB .... Phuket Villa Q is to be retained by
H, but subject, apparently, to the children’s right to have
H access to it. By recital R, however, H undertakes that H
Villa Q will, upon his death, be inherited by W to hold in
trust for the children. To secure such inheritance, H
I I
undertakes to execute a will to that effect! When this was
put to H in cross examination (A2/495.129), it became
J clear that he did not understand / appreciate the restrictions J
that were to be imposed by the terms of the Amended
Consent Summons on his ability to deal freely with Villa Q.
K As far as W is concerned, she clearly did not appreciate K
that H’s offer to execute a will did not carry the security
L she envisaged! Recital BB just adds to the confusion .... By L
this recital, H undertakes to make arrangements in his will
that, should he die before W, she shall hold all assets
M received by ‘her’ in this Consent Summons in trust for the M
children. Firstly, it clearly does not make sense for H to
deal with assets received by W in his will... .one must
N N
presume that the word “her” in recital BB is intended to
read “him”. This error is repeated in recital CC where the
O reference to “all assets received by him” should read “her”. O
If these recitals are to be read as presumably intended, it
P being clear that neither party knowing which of them is P
going to die first, both would seem to be limited from in
any manner dealing with any of the assets received by
Q him/her under the terms of the Amended Consent Q
Summons, as they may have to be held in trust for the
R
children! One wonders whether “all assets received by W” R
includes the sum of US$3m mentioned in Recital GG and
order 2, albeit W is purportedly to receive the same as
S “child maintenance”. Again what assets of H are to be S
included within the terminology of Recital BB? Is Villa Q
an asset that H has “received” by this Consent Summons?
T T
Villa Q is already in his name - indeed what assets is H “to
U U
V V
由此
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A A
receive” by this Consent Summons, which H is, by will,
B under Recital BB, to pass to W in trust for the children? B
Perhaps that is the reason why Recital R is included to
ensure that villa Q is inherited by W in trust for the
C C
children....
To add further to the confusion arising from Recital R,
D there is mention that “in the event of H’s death, the part D
owned by W’s father’s Villa, Phuket Villa P, shall be
E inherited by W in trust for the children”. I presume the E
word “Villa” appearing after the words “Respondent’s
father’s” is otiose.... No part can have been owned by W’s
F father’s villa! If that is correct, I am unable to see what F
right H has to attempt to dispose by will of that part of
Villa P as is owned by W’s father. The part of Villa P as is
G G
beneficially owned by H, on the other hand, “shall” (by
Recital P above) be transferred to W in trust for the
H children ... but only “in the event of H’s death”. Certainly H
W understood that H’s beneficial share was to be
transferred to her, albeit in trust for the children rather than
I I
awaiting the death of H. Indeed, in the knowledge that,
sadly, W’s father has now died, one wonders how this
J might affect the arguments that have apparently already J
surfaced between the heirs to his estate, if the Amended
Consent Summons were to become an Order of this Court.
K K
L 37. Other difficulties exist with respect to the other Recitals. It L
was also a matter of concern that the husband believed that order 5 – i.e.
M M
that there be liberty to apply as to the implementation of the terms of the
N order, meant that the court could intervene and make good the obvious N
difficulties with respect to the way in which the agreement had been
O O
drafted. This was clarified during the trial.
P P
38. In conclusion it seems to me that this was a very poorly
Q Q
drafted document and one that would be almost impossible to enforce as it
R stands. Further it was clear that neither party fully understood the potential R
implications of many parts of it.
S S
T T
U U
V V
由此
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A A
Are there any grounds for concluding that an injustice would be done by
B B
holding the wife to the terms of the consent summonses?
C 39. It does not seem to me that the Amended consent summons C
was entered into freely or with a full appreciation of its implications. In
D D
particular, it is clear that there had been a material lack of disclosure,
E especially with respect to the family expenses and that the wife did not E
receive full legal advice before signing either document. I specifically
F F
accept that she did not receive advice on the consent summonses
G themselves. Further, although I would accept that the pressure that she was G
subjected to did not amount to duress, nevertheless she was placed under
H H
inappropriate pressure during the negotiation process. I am also conscious
I of the fact that the wife’s emotional state at the time was a cause for some I
J
concern given H’s situation at the time including the fact that he was in J
and out of hospital on a regular basis, especially during the period that the
K K
first consent summons was negotiated and signed. Although the husband
L
complains that the wife has used H’s condition unfairly, it nevertheless L
seems to me that this is a material factor to be taken into account.
M M
Ultimately I am also not convinced that the agreements are fair, although I
N am cognizant of the huge amount of money that has been spent on legal N
costs to date and the fact that if the husband comes up to proof on many
O O
aspects of the disclosure, that both parties will need to radically alter their
P lifestyles going forward. P
Q Q
Conclusion
R 40. Having considered all of the above, it is ordered that both the R
original consent summons dated the 4 May 2017 and the Amended
S S
Consent summons dated the 16 October 2017 be set aside. As rightly
T pointed out by Mr Pilbrow, this is not the sort of case that was anticipated T
U U
V V
由此
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A A
in Crossley, where truncated Form E’s were filed and the parties proceeded
B B
to bypass many of the normal rules relating to disclosure etc. Here it will
C be necessary for the parties to make full and frank disclosure of their C
financial situation and this is likely to go beyond the disclosure filed to
D D
date. Form E’s were filed in August 2018. Thus in the first instance it
E is further ordered that updated Form E’s shall be filed and exchanged E
within the next 42 days. There shall also be a further First Appointment
F F
on the 7 February 2020 at 9:30 am. I shall not order in the first instance
G that the parties do personally attend this hearing, although this will clearly G
become necessary as the case develops.
H H
I Costs I
J
41. I can see no reason why costs shall not follow the event in the J
normal way. Thus I shall make an order nisi to be made absolute in 28
K K
days’ time that the Petitioner husband shall pay the Respondent wife’s
L
costs on a party and party basis to be taxed if not agreed. There shall be L
certificate for counsel.
M M
N N
O ( Sharon D MELLOY ) O
District Judge
P P
Q Q
Ms. Mairead Rattigan instructed by Oldham Li & Nie for the Petitioner
R R
Mr. David Pilbrow S.C instructed by Withers for the Respondent
S S
T T
U U
V V