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To Also Known As Tt v Ko

Judgment Cited authorities 11 Cited in Precedent Map Related
Vincent
Judgment Date22 October 2021
Neutral Citation[2021] HKCA 1545
Judgement NumberCACV541/2020
Citation[2021] 5 HKLRD 137
Year2021
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV541/2020 TO also known as TT v. KO

CACV 541/2020

[2021] HKCA 1545

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 541 OF 2020

(ON APPEAL FROM FCMC NO 12767 OF 2018)

________________________

BETWEEN
TO
also known as TT		 Petitioner
and
KO Respondent

________________________

Before: Hon Kwan VP, Barma JA and Au JA in Court

Date of Hearing: 30 September 2021

Date of Judgment: 22 October 2021

________________________

J U D G M E N T

________________________

Hon Kwan VP (giving the Judgment of the Court):

1. On 17 July 2020, Her Honour Judge Melloy handed down her judgment (“the Judgment”) that the petition for divorce filed by the wife on 8 October 2018 be dismissed on the ground that the Hong Kong courts lack jurisdiction to entertain the same under section 3(b) of the Matrimonial Causes Ordinance, Cap 179 (“MCO”)[1] in that neither the wife nor the husband was habitually resident in Hong Kong throughout the period of three years immediately preceding the date of the petition (ie from 8 October 2015 to 7 October 2018)[2]. She ordered that the decree nisi dated 20 February 2019 be rescinded and that the husband’s undertakings to the wife and to the court given in the order dated 18 April 2019 be discharged. The appeal of the wife was brought with leave granted by the judge on 25 September 2020 and the rescission of the decree nisi was stayed pending the outcome of this appeal.

2. Eleven grounds of appeal were advanced in the notice of appeal. They may be divided into two broad issues. Grounds 1 to 6 raised the contention that the husband should not have been allowed to challenge jurisdiction given that a decree nisi had already been pronounced and the court was functus officio; that setting aside the decree nisi can only take place by a fresh action or an appeal (in which case the burden is on the husband to show that the judge’s finding was plainly wrong); that res judicata (both cause of action estoppel and issue estoppel) had arisen; and that the husband has submitted to jurisdiction and is debarred from challenging it. Grounds 7 to 11 sought to challenge the judge’s findings of fact that the parties were not habitually resident in Hong Kong throughout the relevant period of 8 October 2015 to 7 October 2018. It is fair to say that the bulk of Mr Richard Todd’s submissions on behalf of the wife[3] focused on the first of the two broad issues, namely, that there was no jurisdiction to entertain the husband’s challenge to jurisdiction, alternatively that the court should not have exercised that jurisdiction in the circumstances.

Background

3. The relevant background matters may first be stated as follows.

4. The husband and wife are Japanese. The husband is a renowned businessman of great wealth. In 1998, he was a widower with two adult children. He married the wife in 1999 in Tokyo. He was then aged 56 and she was 25. They lived in a large family house in Tokyo for the first ten years of their marriage. Their only child, a daughter (“R”), was born to them in Tokyo in November 2009.

5. In 2008, the husband decided to set up a new casino business in the Philippines. To facilitate this project, he set up a corporate structure in Hong Kong in 2010 including a private holding company (“OHL”) and an intermediary holding company (“TRA”), with the intention eventually to seek public listing on a stock exchange in Hong Kong. OHL and TRA were holding entities and did not carry out any business operations here. TRA held 99.9% of the shares of a company established by the husband in the Philippines for the casino business. In 2011, he incorporated a company in Hong Kong to manage his art collections, some of which are housed in a museum he established in Japan in 2013.

6. Since the commencement of the new casino project, the husband travelled extensively between the Philippines, Macau, Hong Kong, Japan and the United States. In around December 2010, he moved to Hong Kong. The wife and R followed in April 2011. The husband rented a luxurious apartment for the family on the south side of Hong Kong Island. The lease was renewed every two years until it was terminated by the husband in November 2018. He did not purchase real property in Hong Kong.

7. The wife was issued a Hong Kong Identity Card in September 2011. In 2014, R was enrolled in a school in Stanley. The wife’s younger sister (“Y”) stayed in Hong Kong and assisted in taking care of R. In September 2018, when R was almost nine years old, she was sent to an exclusive boarding school in Switzerland.

8. From the time of the construction of the casino project in early 2011 to the time when the casino resort became operational in December 2016, the husband spent on average 20 days per month in Manila, with the rest of the days either in Japan or Hong Kong. Initially he rented a large house as his residence in an exclusive district in Makati City, Manila. Later he purchased a large house as his residence in the same exclusive district in Manila. He maintained the family house in Tokyo. After the completion of the casino project in Manila, the husband gradually shifted his focus back to Japan.

9. According to the immigration records, the days of the husband’s stay in Hong Kong during the period from 7 October 2015 to 8 October 2018 were as follows:

Period
Days in Hong Kong per year
Average Days in Hong Kong per month
7 October 2015 to
6 October 2016
35 days/366 days
3 days
7 October 2016 to
6 October 2017
51 days/365 days
4.25 days
7 October 2017 to
8 October 2018
148 days/367 days
12 days

10. The husband explained that whenever he travelled to Hong Kong, the main purpose was to visit R. As for the longer period of his stays in Hong Kong during 7 October 2017 to 8 October 2018, this was because his passport was detained due to an investigation by the Independent Commission Against Corruption in respect of a complaint made by TRA in July 2018. The husband was removed as a director of TRA in May 2017 as a result of a “business coup” and the wife replaced him as a director. He was free to travel when he was subsequently cleared by the authorities.

11. Throughout the period of three years immediately preceding the date of the petition, the wife had spent much less time in Hong Kong than in Japan. Her international travels increased as R became older.

12. According to the immigration records, the days of her stay in Hong Kong during the period from 7 October 2015 to 8 October 2018 were as follows:

Period
Days in Hong Kong per year
Average Days in Hong Kong per month
8 October 2015 to
7 October 2016
112/366 days (about 30%)
9.25
8 October 2016 to
7 October 2017
92/365 days (about 25%)
8
8 October 2017 to
7 October 2018
43/365 days (about 12%)
4

13. According to the entries and departures in and out of Japan for this period, the days of her stay in Japan during this period were as follows:

Period
Days in Japan per year
Average Days in Japan per month
8 October 2015 to
7 October 2016
137/366 days (about 37%)
11
8 October 2016 to
7 October 2017
169/365 days (about 46%)
14
8 October 2017 to
7 October 2018
149/365 days (about 41%)
12

14. The marriage probably broke down in 2016/2017, with each side accusing the other of extra marital relationship. As mentioned, there was a “business coup” against the husband in May/June 2017. The wife, a business man with whom she was alleged to have a relationship, and the two adult children of the husband were involved in the coup. In 2017, the husband brought proceedings in Hong Kong to challenge his removal from the companies. TRA brought proceedings against the husband in Hong Kong claiming breach of duties as a director and made a complaint against him to the ICAC. There was other litigation in Hong Kong and other jurisdictions.

15. On 8 October 2018, the wife presented a petition for divorce on the ground of unreasonable behaviour. In the petition, it was stated that both parties “have been habitual residents in Hong Kong throughout the period of 3 years immediately preceding the date of this Petition”. The husband was served with the petition at the Hong Kong International Airport on 31 October 2018. Under rule 15(2) of the Matrimonial Causes Rules, Cap 179A (“MCR”), the husband had eight days after service of the petition to give notice of intention to defend (ie Form 4). Rule 15(3) further provides that such notice may be given at any time before directions for trial are given, notwithstanding that the time limited for giving the notice has expired.

16. On 18 October 2018, the wife applied for and was granted Hong Kong permanent residency by the Immigration Department on the basis that she had been ordinarily resident in Hong Kong from September 2011 to October 2018 and had not been absent for any period of more than six months during that time. As part of her application, she made a declaration of having taken Hong Kong as her “only place of permanent residence”. When the husband terminated the lease of the apartment, the wife moved to a new apartment that she rented. The husband had also expressed interest of applying for Hong Kong permanent residency during October 2018 to January 2019, for tax reasons. He did not however proceed with the application.

17. On 9 November 2018, the wife filed an application to the registrar for directions for the trial of the divorce petition by entry of the cause in the Special Procedure List on the basis that the time limit for giving the notice of intention to defend had expired and this could be treated as an “undefended cause”. The application was made under rule 33(2A) of the MCR, with a supporting affirmation of the wife in Form 21(7)...

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