H v. H

CACV000195/1980

Headnote: Matrimonial: Ancillary Relief: great wealth

Section 7 Matrimonial Proceedings and Property Ordinance: Duty of APPEAL COMMITTEEufficiency of affidavit:

IN THE COURT OF APPEAL

ON APPEAL FROM THE HIGH COURT

COURT OF JUSTICE, SUIT NO. 53 OF 1980

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Coram: Leonard J.A., Silke and Barker JJ.

Date of Judgment: 4th May, 1981.

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JUDGMENT

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Silke J.:

1. The parties were married in 1970. Differences arose and they have ceased to communicate with each other since 1979.

2. There were carious interchanges between their respective legal advisers and a Petition on the grounds of behaviour was issued by the Respondent/Petitioner - "the wife" on the 27th of June 1980. The answer was filed on the 23rd September 1980. It contains a cross petition.

3. A series of interlocutory matters then arose such as an application for the ouster of the Petitioner from the matrimonial home and that which I might call a cross summons in the same matter from the Petitioner, an injunction as to chattels and an application for maintenance pending suit.

4. Though this last was compromised by the payment of an agreed sum of HK$30,000 per month, it in fact gives rise to the events leading to this appeal.

5. A Form 8 notice had been served and this required the filing of an affidavit by the Appellant/Respondent - "the husband".

6. No affidavit was filed and, after argument, there was made, an the 30th September 1980, an order under the provisions of Rule 73(2) of the Matrimonial Causes Rules that he do file such an affidavit.

7. The result was the affidavit filed on the 7th October 1980 which reads as follows:

8. The wife did not consider that this affidavit complied with the terms of Rule 73(2) and a summons was issued - which sought in terms the filing of an affidavit or a further affidavit.

9. Having heard both Mr. Swinton Thomas in support of the application and Mr. Johnson against, Fuad J., on the 9th December 1980, ordered that a further affidavit be filed.

10. It is noteworthy that the husband did not seek to appeal the first order. It is from the second order that this appeal comes before us and we have also had the assistance of Mr. Johnson, with him Mr. Rodway for the husband and Mr. Swinton Thomas, with him Mr. Allman Brown, for the wife.

11. The main thrust of Mr. Johnson's submission is, to be colloquial, "what does it matter?" Does it matter if the husband if worth US$150 million or US$200 million bearing in mind that which is likely to be the needs of the wife and the sufficiency of the husband's resources to satisfy those needs.

12. While Mr. Swinton Thomas has argued that it is conceivable that the Judge who will deal finally with the financial matters in this suit could make a periodical payments order it does seem to us that a lump sum order is the obvious solution. But we hasten to add that we have no desire to enter into that which will be the final form of order to be made here. We refer to this simply because we are aware of an offer already having been made and Mr. Johnson in his reply made reference, as illustrative of his "it does not matter" submission, to sums which could be awarded on a lump sum basis - and that award made without any further affidavit by the husband.

13. Mr. Johnson goes on to advert to his fears of a Rule 77 questionnaire and seems to say that the more detail you give the more ammunition you provide to the other side to raise what amount to interrogatories. There is already argument as to the value of the matrimonial home in that the husband values it at HK$20 million and the wife at HK$40-60 million.

14. There has also been raised the value of the ranch in the United States. In both this ranch and the matrimonial home the wife claims a contribution - not in the financing of either but in the less definable area of helping to create the appurtenances of the both by participating in the furnishing, decoration and planning of them. The home claim appears at an early stage in these proceedings. The ranch raised itself into the status of a claim before us in argument.

15. His argument is, as we see it, based mainly on relevance. The issue says Mr. Johnson is the needs of the wife bearing in mind her reasonable requirements and he cites in support certain old, but he submits good, authorities relating to irrelevant or oppressive discovery and interrogatories.

16. The first was in Re Leigh's Estate⁽¹⁾ and concerned the sale and purchase of horses, the question being whether or not this was sale on commission. Discovery was sought of the prices at which sales were made. The Court of Appeal refused discovery as irrelevant to the issue and Jessell M.R. at p.262 said:

"The question we have to decide is this - first of all has it any direct bearing on the issue to be tried? and in my opinion it has none."

17. James L.J. at p.263 said:

"I think the 19th Rule of the Order XXXI is one of the most wholesome rules introduced by the Judicature Act into practice, namely that no discovery is to be taken from a defendant unless it is really relevant to the issue first to be tried."

18. In Parker v. Wells⁽²⁾ which related to answers to interrogatories, Jessell M.R. at p.485 said of part of one of the interrogatories

"..... and as to the latter part I never saw anything more oppressive or unreasonable. It is only in family suits where a bitter feeling has arisen that such unreasonable demands are made. A discovery such as is asked for by the interrogatory is only tolerable where the exigency of the case requires it and here such a discovery is not necessary."

19. Brett L.J. at p.485, having considered the difference between the Rules in Chancery and in Common Law and the intention of the Judicature Acts to introduce a new intermediate practice, went on to say:

"This practice is regulated by the General Orders, and Order XXXI Rule 19 is the rule which governs the present case. The answer to interrogatories to which this appeal relates could not determine any issue in the action and if they have to be given at all they ought not to be required to be given till after issues have been decided."

20. In Kennedy v. Dodson⁽³⁾ an action for a declaration as to a partnership between the defendant and C. and that being the issue, the plaintiff exhibited interrogatories to the defendant asking for particulars of purchases of land by the defendant and C. in order to show that they had been co partners in various other transactions in 1873.

21. Lindley L.J. at p.340 said:

"Under ordinary circumstances we should not think of interfering with the decision of the Judge in the Court below in a matter which is very much a matter of discretion. But I cannot help thinking that these interrogatories are vexatious and oppressive to such an extent that the Defendant ought not to be compelled to answer them. They are opposed to the fundamental principles of discovery which was stated in Sir J. Wigram's treatise on Discovery.

22. The second proposition stated (1) is as follows:

23. It must be born in mind that in this form of matrimonial proceeding the affidavits are the pleadings.

24. In White & Co. v. Credit Reform Association and Credit Index Limited⁽⁴⁾ - a libel action - the plaintiff sought to administer to the defendants an interrogatory requiring them by reference to their books, or otherwise, to give the names of the companies, firms, and persons to whom a certain publication of the defendants, containing the statements complained of, had been supplied, by or through the defendants or their agents. It was held that the interrogatory was oppressive and ought not to be allowed.

25. Collins M.R. at 659 said:

"Now there is one general principle underlying the whole law as to interrogatories, namely, that they must not be of such a nature as to be oppressive, and to exceed the legitimate requirements of the particular occasion. To require of the publishers of a publication like the defendants' that they should go through their books, and by reference thereto, or otherwise, specify all the companies, firms, and persons to whom the publication has been supplied, or shown by or, through the defendants or their agents, on the chance that some person may be discovered in whose case the publication would not be privileged, would be, in my judgment, oppressive; and therefore I think that we should be misusing the jurisdiction given to us in the matter, if under the circumstances we were to allow such an interrogatory to be administered."

26. It is Mr. Johnson's analogous submission here that to value all the assets of the husband would not only entail considerable expense but also take a great deal of time. He instances the difficulties which may arise upon valuation by reference to the presently disputed value of the matrimonial home, and that his lay client may find himself overwhelmed by Rule 77 interrogatories if he goes into detail and this would be oppressive and in any event further details are too remote in their bearing on the real point at issue.

27. In Hulton v. Hulton⁽⁵⁾ which was heard before lump sum provisions were introduced and when separate petitions were filed in respect of maintenance, the wife claimed maintenance alleging that the husband had a very large income derived from shares in a private newspaper company, director's fees, freehold and leasehold property, a racing establishment and breeding stud, greyhounds, and other property. The husband in answer declined to give minute details but admitted to what was then a very large income indeed of £29,000 per year dividing it as to £12,000 from director's fees, £11,475 from shares in the newspaper company and £2,400 from shares in another company. He offered to agree to an order of £1,500 per year. The wife sought an order that he make further and better answer, the Registrar held he had sufficient material before him and refused to order a further answer and an Appeal from the Registrar's order was dismissed. On further appeal the Court of Appeal held that there was no hard and fast rule fixing any proportion of the husband's income as the correct amount to be allowed for maintenance: but the Court had to consider (inter alia) the security to be given for the allowance and in that case there were no materials upon which this could be done. It was ordered that a further affidavit be filed.

28. Mr. Johnson seeks comfort from that passage in the judgment of Phillimore L.J. at p.62 wherein the Lord Justice said, having agreed with the Canons and General Principles laid down by Cozens-Hardy M.R.,:

"It seems to me difficult having regard to the section of the statute, - I do not say imposiible - to release the husband from the duty of deposing to his maximum income; but I wish it for myself to be understood - and I think it is the opinion of the Master of the Rolls - that it does not at all follow there should be the same nicety of security when the income is large and admitted on oath, and fairly admitted, as there should be if the income were small."

29. Mr. Johnson submits that here there can be no question of doubt that a lump sum order will be made bearing in mind the "clean break" principle of Minton v. Minton⁽⁶⁾. If so, he says, the amount of the assets disclosed by the husband are of themselves more than enough to suffice for the needs of the wife having regard to her reasonable requirements and, in any event, the question of income is not really material, security being unnecessary. The husband has agreed to satisfy any order the Court may reasonably make. And further the income of a man so very wealthy as this is not necessarily indicative of his worth.

30. Further he says there is no "balancing" to be done here, no proportion basis to be used even in the most liberal order that could be contemplated, that there is no problem in the division of the family assets such as in P.V.P. ⁽⁷⁾, nor is there the consideration of financial contribution by the wife as in O'D v. O'D⁽⁸⁾ or Preston v. Preston⁽⁹⁾. Therefore there should not be the same nicety.

31. In Calderbank v. Calderbank⁽¹⁰⁾ Scarman L.J. stressed the necessity for making it

"abundantly plain that husbands and wives come to the judgment seat in matters of money and property upon the basis of complete equality. That complete equality may, and often will, have to give way to particular circumstances of their married life."

32. Lord Scarman went on:

"It does not follow that, because they come to the judgment seat on the basis of complete equality, justice requires an equal division of the assets. The proportion of the division is dependent upon the circumstances. The assets have to be divided or financial provision made according to the guidelines set out in Section 25. Every case will be different and no case may be decided except upon its particular facts."

33. In commenting on this passage in Calderbank⁽¹⁰⁾ Ormrod L.J. in P.V.P. ⁽⁷⁾ at p.490 had this to say:

"That passage should be regarded as the guideline in all these cases, and I would stress today, as I have stressed before that the word "equality" does not have any place, any more than the phase "family assets" has any plea in Section 25. It is a great mistake to approach these cases as if either of those phases were to be found in the section."

34. The section 25 referred to is in terms the same as our section 7 of the Matrimonial Proceedings and Property Ordinance except that the English section goes on to speak of placing the parties in the financial position in which they would have been if the marriage had not broken down. Ours does not contain these or similar words.

35. Mr. Johnson submits that this case is unique in the vastness of the wealth involved and that none of the English authorities, except perhaps Edgar v. Edgar⁽¹¹⁾ had for consideration wealth of this nature. And he seeks to rely on dicta of Ormrod L.J. in Edgar v. Edgar⁽¹¹⁾ to support his argument that different principles should apply here because of the very nature of the case - different that is by going into no greater detail than that which the husband's affidavit already does.

36. I would interpolate here that, for my part, I would absolve that husband from any attempt to overwhelm the Court with that wealth and from attempting to use it to avoid compliance with the Rules or the Section.

37. Edgar v. Edgar⁽¹¹⁾ was the case of, to quote Ormrod L.J. at p.1412, an "extremely rich husband" a "multi-millionaire who is in a position to make a very large payment without liquidity problems". There the Court of Appeal had for direct consideration a contract point, not the application of section 7, or Rule 73(2) for that matter, to persons of great wealth but Ormrod L.J. seems to leave open the possibility that different principles might apply in such cases for he says at p.1419 H:

"This Court has not yet had occasion to consider the application of the principles of Section 25 to cases involving very rich people although a little assistance may perhaps be had from O'D v. O'D, a case involving a rich, but not extremely rich husband. The point does not arise directly for decision in the present case, so I shall not say any more about it on this occasion."

38. Mr. Johnson urges upon us further that the passage of the judgment of Lord Justice Oliver in Edgar v. Edgar⁽¹¹⁾ at p.1422 A-D is of importance but with respect we do not see its relevance to the circumstances here for it concerns first the contract point - a contract into which the wife entered after good and strong advice that she could expect to receive a sum substantially in excess of that in the contract in divorce proceedings proper - and second the "would have been" provisions which do not exist in our section 7.

39. We have gone into the Appellant's submission in some detail for as far as we are aware the point has not been argued previously. And for myself I am of the view that Mr. Johnson's submissions as to relevance have their attraction.

40. Mr. Swinton Thomas in his argument lends some colour to the view I have just expressed in that he concedes that should any fresh affidavit be filed he would not ask for any asset below the value of HK$1 million to be set out and further when he agreed that an extra US$10 million would not matter very much but that a sum substantially in excess would.

41. We are however directly concerned with the construction of a statutory provision and of subordinate legislation. We are also concerned with the exercise of his discretion by the Judge.

42. Mr. Swinton Thomas submitted eight major points -

43. We would set out those legislative provisions here. Section 7(1) of the Matrimonial Proceedings and Property Ordinance states, inter alia:

"It shall be the duty of the Court in deciding whether to exercise its powers under section 4 or 6 in relation to a party to the marriage to have regard to the conduct of the parties and all the circumstances of the case including the following matters that is to say-

44. Rule 73(2) of the Matrimonial Causes Rules states:

"Where a Respondent spouse or a petitioner is served with a notice in Form 8 or 9 in respect of an application for ancillary relief not being an application to which Rule 74 or 75 applies, then, unless the parties are agreed upon the terms of the proposed order, he shall, within 14 days after service of the notice file an affidavit in answer to the application containing full particulars of his property and income and if he does not do so the Court may order him to file an affidavit containing such particulars."

45. The emphasis in both the statute and the rule is mine.

46. It is not our intention, and we hope Mr. Swinton Thomas will not think we do him any dis-service, to deal in detail with each and everyone of these points.

47. It seems to us, however attractive Mr. Johnson's argument may be, that there are three factors which the "it does not matter", or relevance proposition, has to overcome.

48. The first is the wording of rule 73(2). While by agreement the valuation can be arrived at, as was apparently done in S.v.S., ⁽¹²⁾ a big money case, nevertheless there must be, in our judgment, particulars before the Court upon which it can act though the phrase "full particulars" can be qualified as witness Mr. Swinton Thomas' concession as to assets of a value of under $1 million to which I have referred. The affidavit here does not comply with that requirement of the rule and it is open to the Court to order an affidavit in compliance be filed. We accept that the word "may" involves a discretion which must be judicially exercised bearing in mind all the circumstances of the case.

49. Mr. Johnson fears, in the light of the attention to detail already shown by the wife's advisers, in particular in the lengthy Petition, that he will be harassed and oppressed by an interminable series of rule 77(4) requests but if the husband's advisers find that to be so they could have recourse to the Registrar for directions and thus escape harassment, if there be such, and limit pretrial investigation improperly sought.

50. We might add that we do not accept Mr. Swinton Thomas' point that by contesting the interlocutory matters the husband is attempting by weight of money to move the wife from the judgment seat. There has been the offer of HK$15 million in settlement and whatever the final order may be, and we express no opinion on the correctness or otherwise of that offer, the wife's costs will in one way or another be well taken care of. We would not think her to have any legitimate anxiety on that score.

51. The next factor is the provisions of section 7. These are mandatory upon the Court and we do not see how, if the information is not before the Court, it can have regard to the matters set out in the section, however small may be their eventual effect where wealth of this magnitude is involved.

52. We appreciate that there will be considerable expense and some difficulty in attempting to place a valuation upon the assets. For example the Tsimsatsui property which could be valued on its redevelopment potential, as tenanted property or on an anxious buyer or a willing seller/wi ling buyer basis - all of which might well give different figures. But we find ourselves unable to overlook, in a contested case, the duty imposed upon the Court by section 7 and particulars are relevant for the Court must perform its duties under section 7 and consider each of the factors therein set out and these duties bear directly upon the issue. As was said in Page v. Page⁽¹³⁾:

"The problem therefore was to decide the size of the lump sum taking into account all the Section 25 factors including the contribution each made to the welfare of the family".

53. It is true that the parties should come before the Court on the basis of equality - that is equality in that which they are required to do as well as in the Lord Scarman in Calderbank v. Calderbank sence and the wife has complied with the rules.

54. In Lifford (Lord) v. Glynn⁽¹⁴⁾ at p.86 Orr L.J. said, in a somewhat different contect -

"There is not ..... one rule for millionaires and another for less wealthy fathers."

Here we would substitute there is not one rule for multi-millionairs and another for less wealthy men when it comes to compliance with the rules - and "of or in excess of US$100 million" is simply not enough even bearing in mind the possibilities foreshadowed by Ormrod L.J. in Edgar v. Edgar⁽¹¹⁾.

55. The third factor is the exercise of his undoubted discretion by the learned judge.

56. Mr. Johnson criticizes amongst other things the use of the word "Therefore" immediately before the enunciation of his decision by the learned judge, a ruling given, with commendable speed, if we may say so, at the conclusion of the argument.

57. We do not think this, or the other attacks to be justified and that word should be read as indicative of the reasons before given which led to the decision which followed.

58. Even had we come to a view contrary to that of Fuad J., which we do not, it would be quite wrong without the strongest reasons to substitute our views for those of the Learned Judge however attractive Mr. Johnson's argument may be. Fuad J. felt himself bound, as we do, by the duty imposed on the Court by section 7(1). He felt that the disclosure, albeit for genuine reasons, was not full, frank and clear - however willing the husband might be to meet any order the court might finally make and however large the resources from which to meet such order. Indeed he thought it fell so far short of compliance with the provision of his original order "as to be, in effect, no affidavit at all".

59. Again with the greatest respect in our judgment he exercised his discretion judicially and we would not seek to differ from the conclusion he reached.

60. For these reasons we would dismiss the appeal and confirm the order of Fuad J.

Representation:

Mr. Robert Johnson Q.C. & Mr. Rodway (J.S.M.) for Appellant.

Mr. S. Thomas Q.C. & Mr. Allman-Brown (Hampton Winter & Glynn) for Respondent.

(1) [1877] 6 Ch. 256 at 262

(2) [1881] 18 Ch. 477 at 485

(3) [1895] 1 Ch. 334 at 340

(4) [1905] 1 K.B. 653 at 659

(5) [1916] P.57

(6) [1979] A.C. 593

(7) [1978] 1 W.L.R. 483

(8) [1976] Fam.83

(9) (Transcript: Ewebank J. 13 Nov. 1980)

(10) [1976] Fam. 93, 103

(11) [1980] 1 W.L.R. 1410, 1412, 1419

(11) [1980] 1 W.L.R. 1410, 1412, 1419, 1422

(12) The Times: 9th May 1980

(13) The Times: 30th Jan. 1981 C.A.

(14) [1979] 1 W.L.R. 78,86