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Lcklm Nee Cklm v Lwk

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date29 August 2016
Subject MatterMatrimonial Causes
Judgement NumberFCMC11425/2011
CourtFamily Court (Hong Kong)
FCMC11425B/2011 LCKLM nee CKLM v. LWK

FCMC 11425 / 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 11425 OF 2011

----------------------------

BETWEEN
LCKLM nee CKLM Petitioner
and
LWK Respondent

----------------------------

Coram: Deputy District Judge I. Wong in Chambers (Not Open to Public)
Date of Hearing: 9 August 2016
Date of Ruling: 29 August 2016

____________________

RULING
(Hadkinson Order and Leave to Appeal)

____________________

The Applications

1. There are two applications before me.

2. The first is the respondent husband’s application for leave to appeal against my Judgment dated 26 February 2016 (“the Judgment”) in which I dismissed his application to amend §§ J and K of his undertakings (‘the Undertakings”) contained in a Consent Order dated 18 February 2016.

3. The second summons is the petitioner wife’s application for a Hadkinson order for staying the respondent’s leave application until such time after he has purged his contempt of court by compliance with the Undertakings. It is common ground that the Undertakings have the same force and effect as a court order.

4. For convenience, I shall continue to refer the petitioner wife as “P” and the respondent husband “R”. I shall also adopt the same nomenclature and abbreviations used in the Judgment. As I have already set out the background to R’s application to amend, the parties’ arguments and my reasoning in the Judgment, I am not going to repeat the same here. This Ruling has to be read together with the Judgment.

5. Since the Judgment, the parties have performed §§ L to N of the undertakings which deal with the Tung Chung property and the transfer of shares of the 10 relating companies. Both are pointing their finger against each other for the delay in the implementation of these other undertakings. I think it is fair to say that due to the complete loss of trust on each other, both parties were putting forward proposals best suited their interests only and hence resulting in deadlock. Anyway, the only matter now remained is the performance of the Undertakings in respect of the Matrimonial Home, the very subject matter on which amendment is sought by R.

6. In response to P’s Hadkinson application, R agrees to arrange payment into court $6,465,127.55, being the sum required for redemption of the mortgage of the Matrimonial Home and to undertake to comply with the final judgment in resolution of the disputes in connection with the Matrimonial Home (“the New Undertaking”). This has been rejected by P.

7. For obvious reasons, counsel agree to deal with the Hadkinson summons before the leave summons, I would therefore deal with the Hadkinson order first.

The Hadkinson Order

8. Briefly stated, the court has the discretion to refuse to hear, or to impose conditions on, a person who is in contempt and who has not purged his contempt: Hadkinson v Hadkinson [1952] P 285.

9. The Court of Appeal, adopting MA v MI [2004] 2 FLR 932 at [59], set out the questions a court should ask itself in Hadkinison applications in CWG v MH [2014] 4 HKLRD 141 at § 12. They are:

1. Is R in contempt?

2. Is there an impediment to the course of justice?

3. Is there any other effective means of securing compliance with the Court’s orders (in the present case, the Undertakings)?

4. Should the court exercise its discretion to impose conditions having regard to the questions?

5. Is the contempt wilful (is it contumacious and continuing)?

6. If so, what conditions would be proportionate?

Discussion

Is R in contempt?

10. There is no requirement that the non-compliance should be shown to have been culpable. The question of culpability, ie the non-paying party had the means to pay, comes into play as regards the court’s exercising its discretion as to whether and how to act on the contempt so established. At that stage all the circumstances are considered. The standard of proof of ability to pay is the civil standard: Mubarak v Mubarik (No 2) [2006] EWHC 1260 (Fam), [2007] 1 WLR 271, §§ 65 – 66 & 71.

11. Question (1) therefore cannot be disputed. Ms Yip SC, on behalf of R, accepts there is non-compliance of the Undertakings. Ms Eu SC, for P, emphasizes that the Undertakings have been outstanding for over 1 ½ years and there is no stay of execution. There is no reason for R not to have complied with the Undertakings in the meantime. R can still appeal against the Judgment after his compliance with the Undertakings and such appeal will not be rendered nugatory in the event that he succeeds on appeal. In the circumstance, R’s constitutional right is not infringed: CWG v MH, supra, at §18.2.

Is there an impediment to the course of justice?

12. Ms Eu argues that there is an impediment to the course of justice in that the Undertakings should be complied with. R should not be permitted to delay the due administration of justice. This is contrary to the golden rule that court orders should be obeyed.

13. Ms Eu also stresses that the delay has caused prejudice to P. For the reason that R is still holding half of the shares in the company holding the Matrimonial Home, P cannot let out the property in the meantime. She has been kept out of rental for almost one and a half year and suffered a loss of at least $544,000. Further, she received notification from the Buildings Department on 29 June 2016 that certain remedial work for an unauthorized building work had to be carried out, failing which she might be liable to a fine and imprisonment. On the other hand, there is no prejudice to R to comply with the Undertakings. Both parties are persons of means. There is no reason why P would not be able to repay the over-payment should R succeed in his appeal. Ms Eu also makes reference to a recent incident where R unilaterally withdrew money of USD34,525.61 and $13,243.25 from the parties’ joint account without P’s consent and to the fact that R did not provide his new address to P.

14. With respect, the alleged prejudice per se is quite different from an impediment to the course of justice. As has been said by Ryder J in MA v MI [2004] 2 FLR 932:

[48] The emphasis is on the impediment to the course of justice, the wilful and continuing nature of the disobedience that makes it more difficult for the court to ascertain the truth or enforce its orders and there being no other method of securing compliance with the court’s order.

15. R is the applicant in the leave application. He is seeking to advance his case subsequent to the adverse ruling in the Judgment. I do not think R’s conduct amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice. His appeal would not make the court more difficult to ascertain the truth or make the court’s function more difficult to perform. Quite to the contrary, if leave is granted, the issue in dispute would have the opportunity to be clarified and resolved by the Court of Appeal.

16. I agree with Ms Yip that the renting out of the Matrimonial Home and the Building Order can be sorted out between the parties or their legal representatives. I do not find any substance in P’s complaint regarding the withdrawals of funds in so far as it relates to the Hadkinson application. P also made complaint in her affirmation that there was further encumbrance over the Matrimonial Home but apparently the matter was not pursued in the hearing. In any event, I do not find any substance in the complaint.

Is there any other effective means of securing compliance with the Court’s orders (in the present case, the Undertakings)?

17. Ms Eu submits that there is no other effective means to secure R’s performance of the Undertakings; in particular, she contends that the New Undertaking offered by R is useless. The New Undertaking is just a unilateral variation of the Consent Order through the backdoor. Ms Eu also submits that enforcement of court order is an aspect of administration of justice. P should not be bothered to take out expensive satellite litigation for enforcement of the Undertakings.

18. With respect, I do not agree that there are no other effective means to secure R’s performance. There is a variety of enforcement measures in the Rules of the High Court and under the common law for securing compliance in order to remedy P’s alleged prejudice, none of which however has been engaged. R is a well-established businessman firmly rooted in Hong Kong with substantial assets and respectable status in his trade. There is not a hint that any methods of enforcement would be futile.

Is the contempt wilful?

19. Ms Yip argues that there is no contumacious disobedience on the part of R. He has completed with the Consent Order in every way he could, except the Undertakings which are the subject matter of the dispute.

20. It seems clear to me that the contempt is wilful, at least as from the Judgment, which is more than 6 months ago. R is certainly a man of substantial means. There is nothing to suggest that he is not able to pay.

Should the court exercise its discretion?

21. Ultimately, the crucial question is whether in the exercise of its discretion, the court should stay R’s application for leave to appeal by reason of his non-compliance.

22. In Hadkinson v Hadkinson, it was said that there are two exceptions from the general rule. One of such exceptions is that a person can apply for the purpose of purging his contempt and another is he can appeal with a view to setting aside the order upon which his alleged contempt is founded: per Romer LJ, at 289.

23. Ms Yip argues that R’s case falls within one of the two exceptions.

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