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Lsm v Cmp

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date21 September 2015
Year2015
Judgement NumberFCMC7040/2011
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC7040A/2011 LSM v. CMP

FCMC 7040/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7040 OF 2011

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

BETWEEN
LSM Petitioner
(sued by her next friend CTK)
and
CMP Respondent

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

Coram: Deputy District Judge I. Wong in Chambers (Not Open to Public)
Date of Hearing: 8 September 2015
Date of Handing Down Ruling: 21 September 2015

__________________

RULING
(Leave to Appeal)

__________________

The Application

1. This is an application on the part of the respondent husband for leave to appeal against my judgment given on 19 September 2014 (“the Judgment”) in respect of his ancillary relief application.

2. For convenience, I shall continue to adopt the same nomenclature that I used in the Judgment. Thus, I continue to refer the petitioner wife as “W” and the respondent husband as “H”.

3. In the Judgment, I awarded H a lump sum of $900,000 which is about 14% of the matrimonial assets at the time of trial. However, for the reason that W has been able to achieve a sum more advantageous than her open offer, I ordered H to pay one-third of W’s costs of the ancillary relief proceedings.

4. Dissatisfied with the outcome, H seeks leave to appeal. On the face of it, his application was taken out more than 28 days after the Judgment but it was still within time because of the legal aid stay in the interim arising from his application for legal aid.

5. H’s application was originally fixed to be heard on 19 March 2015 but was postponed due to the downturn of W’s health. What happened was that W met with an accident at home in October 2014 and was sent to hospital. Her condition since then had deteriorated and she became mentally incapacitated. The youngest son TK had to suspense his final year in the university and return to Hong Kong for the purpose of acting for his mother as her next friend in the proceedings. He is also granted legal aid in the defence of the application.

6. It is sad to see that the mishap and the events that followed have not been able to stop the present proceedings.

The Legal Principles

7. The parties have no dispute over the applicable legal principles.

8. The relevant test governing applications for leave to appeal from the District Court is provided in section 63A(2) of the District Court Ordinance (Cap 336) (“the DCO”):

“Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that –

(a) The appeal has a reasonable prospect of success; or

(b) There is some other reason in the interests of justice why the appeal should be heard.” [emphasis added]

9. The Court of Appeal discussed the application of s 63A(2) of the DCO in Sunny Tadjudin v Bank of America, National Association, HCMP No 691 of 2012, unreported, 29 June 2012 at paragraphs 8 – 10:

“8. Under section 63A(2) of the District Court Ordinance, Cap 336, leave to appeal to the Court of Appeal shall not be granted unless the Court of Appeal is satisfied that the appeal has a reasonable prospect of success, or that there is some other reason in the interests of justice why the appeal should be heard. Counsel relies on both limbs in section 63A(2) in seeking leave to appeal.

9. Reasonable prospect of success involves the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable” (SMSE v KL [2009] 4 HKLRD 125 para 17). Furthermore, it is pertinent to bear in mind that even if there is a reasonable prospect of success on appeal, the court still retains a discretion whether to grant leave to appeal, although the fact that there is, ex hypothesi, a reasonable prospect of success would heavily influence the court’s exercise of discretion (Ho Yuen Ki Winnie & Ors v Ho Hung Sun Stanley & Anr. HCA 391/2006, 25 May 2009, A Cheung J para 3; and HCMP 1009/2009, 24 August 2009, para 22).”

The Respondent’s Intended Grounds of Appeal

10. As I have already set out the parties’ case and the finding of facts in the Judgment, I do not propose to repeat them here. As a matter of fact, there is no challenge on any of the findings made by me. Reference to the relevant parts of the Judgment will be made as and when necessary.

11. There are 8 grounds in the Draft Notice of Appeal.

Ground 1

12. H argues that I have wrongly exercised the discretion in giving an award of $900,000, which is slightly below 14% of the total family assets. The award is even lower than the open offer made by W at the beginning of the trial which was $1,100,000 plus costs to be taxed if not agreed (para 43 of the Judgement).

13. Ms Tsui, for H, submits that it is wrong for the court to award a figure below the open offer. W must have taken into account her present assets, her future needs and H’s needs for future accommodation in the face of eviction by W’s brother (referred to as “LYM” in the Judgment) after the divorce. She is bound by her open offer without exceptional circumstances. Therefore, the baseline is for the court to award H the open offer.

14. To start with, I do not think there is anything as a matter of law that the court in an ancillary relief proceeding is bound by the open offers of the parties.

15. Mr Leung, for W, argues that the court is not bound by the approach taken by the parties. He refers me to the Court of Appeal judgment in L v C [2007] 3 HKLRD 819 where Stock JA (as he then was) said in para 22:

“22. The judge was entitled to adopt an approach that was independent of either that had been advanced by the parties:

“The quasi-inquisitorial role of the judge in ancillary relief litigation obliges him to investigate issues which he considers relevant to the outcome even if not advanced by either party. Equally he is not bound to adopt a conclusion upon which the parties have agreed.”

per Thorpe LJ in Parra v Parra[3].

16. Although in that case the Court of Appeal was dealing with the implication of a nuptial agreement, as I see it, the same principle applies. If a family judge is entitled to adopt an approach that is independent of the parties, and as a consequence, he has come to a different figure, a figure that is lower than the open offer, I see no reason why he cannot do so if the circumstances warrant.

Ground 2

17. On this ground H argues that I have failed to take into account, in the identification of assets for distribution, the sale proceeds of $3,350,000 that W pocketed as the developer of the 47E House. If this sum is added to the pot the total family assets available for division would be $9,790,000 and not just $6,440,000 as found by the court.

18. Ms Tsui contends that the correct approach is to put this sum back to the matrimonial pot before division subject to achieving a right balance after considering all the other factors. The court should consider whether W’s expenses were reasonable during the period and then decide whether to exclude the whole sum or part of it.

19. With respect, I do not agree.

20. The 47E House was developed and sold for $3,350,000 in September or October 2001, some 12 years prior to the trial. I had already considered and determined whether $3,350,000 was available for distribution when I considered whether W had any hidden assets. At paragraph 186 of the Judgment, speaking of whether W had any hidden assets, I said as follow,

“186. However, I believe these assets are not too substantial. W has not been working for many years. Whatever monies she had retained or gained from PK, the Uptown Property and the development of the 47E House were subject to depletion as times went by and together with the fact that she had been supporting TK’s education. Accurate figure can never be known. Doing the best I can, I would put it at $500,000. I find that she has undisclosed assets of at least $500,000.”

21. As said, the intended appeal is not concerned with any facts found by the court. It is clear that according to my findings I had already included the sale proceeds, if any were left, in the matrimonial pot. In any case, the level of W’s spending or its reasonableness was never raised and was not a subject of dispute in trial.

22. I conclude that H has no reasonable prospect of success on this ground.

Ground 3

23. H submits that while I am correct to accept that the “principle of sharing” should apply in the present case when the marriage is undoubtedly a long one, when the family assets exceed the basic needs of the parties; and when the parties are in agreement that the yardstick of equality should apply (paragraphs 47 and 210 of the Judgment), I erred in deviating from the principle of sharing when doing the actual division.

24. Ms Tsui emphasizes that in the present case the parties have already agreed to share the family assets equally. What is in dispute is the size of the matrimonial pot only. She submits that the court was bound by the agreement. That was how the parties conducted their case in trial and throughout they never withdrew from this agreement.

25. Again, Mr Leung draws my attention to what Stock JA (as he then was) has said in L v C [2007] 3 HKLRD 819:

37. When parties who are sui juris freely enter upon a bargain for the division of matrimonial assets then, absent unfair or unconscionable factors attaching to the circumstances in which that agreement came to be concluded and absent unforeseen circumstances arising after the conclusion of the agreement such as to cause manifest prejudice to one of the parties, the courts will hold the parties to their bargain. For reasons of policy, the courts will not permit the parties by agreement to oust the...

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