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FCMP 21/2017
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MISCELLANEOUS PROCEEDINGS NO.21 OF 2017
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BETWEEN
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CL |
Applicant |
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ZRC |
Respondent |
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Coram: Deputy District Judge D. Cheung in Chambers (Not open to public)
Date of Hearing: 20th March 2017
Date of Handing Down Reason for Decision: 27th March 2017
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Reasons for Decision
( Leave for s29AC MPPO Application )
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1.On 17th January 2017 the Applicant (hereinafter called “W”) applied by way of an ex parte originating summons for leave under section 29AC of Part IIA of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”) to make application for financial relief against her former husband the Respondent (hereinafter called “H”) herein upon the dissolution of their childless marriage earlier by a court in PRC.
2.In support of her leave application W had filed an affirmation. On 20th March 2017 after hearing her counsel’s submission, I reserved my decision and now I granted W leave with reasons for my decision.
Relevant Background
3.W and H started cohabitation since the end of 2008 and got married in May 2011. Both H and W came from Shanghai but moved to Hong Kong since 2005 for university. They first met in Shanghai during High School. In 2004 they attended university in Shanghai, and in the following year they moved to Hong Kong. All along the extended families of the parties were in Shanghai.
4.H started working in Hong Kong since 2008. Later he obtained his Hong Kong permanent resident identity. From February 2009, the parties lived together in Hong Kong. The parties got engaged in January 2011 and married in Shanghai in May 2011.
5.In 2010 H purchased a property in Hong Kong for his residence (for the present purpose I would refer this property as the matrimonial home), the parties moved into the matrimonial home in August 2011. W would stay in the matrimonial home during her stay in Hong Kong.
6.The parties resided in Hong Kong briefly and moved to Beijing in January 2012 after H took up an offer to work in Beijing. After settling in Beijing, W also looked for employment and eventually secured a job in Tsinghua University. The parties worked and resided together in Beijing.
7.In August 2013 H moved to Hong Kong for his new employment and resided in the matrimonial home while W remained in Beijing for her employment.
8.The triggering incident happened on 8th August 2014, W having arrived Hong Kong late that night, returned to the matrimonial home, where the parties had an argument over the night until the early hours on 9th August 2014.
9.W petitioned for divorce in Hong Kong in August 2014 and afterwards in September 2014, H commenced the divorce proceedings in Shanghai Changning People’s Court. In the PRC proceedings, W challenged the jurisdiction but failed. In the Hong Kong proceedings, H challenged the jurisdiction and asked for stay of the Hong Kong proceedings on the ground of forum non conveniens.
10.On 4th February 2015, Deputy District Judge A Yim handed down her judgment finding there was jurisdiction of the Hong Kong Court to deal with these proceedings by virtue of H’s substantial connection in Hong Kong but ordered a stay of the proceedings on the ground that the court in Shanghai was the more appropriate forum.
11.The PRC divorce proceedings were first heard in Shanghai Changning People’s Court, where the marriage was dissolved and H was ordered to pay RMB32,500 (half of the value of a Toyota vehicle in PRC) on 22nd February 2016. To date, H has yet to settle this outstanding sum.
12.However, the Shanghai Changning People’s Court refused to deal with any properties in Hong Kong (including real property, vehicle, other properties, loans and debts and so on in Hong Kong) (“PRC Judgment”). H appealed to the First Intermediate People’s Court but the appellate court upheld the PRC Judgment on 14th June 2016. H attempted to lodge an application to review this decision of the appellate court with the Shanghai High People’s Court but was refused on 28th December 2016. The decision of the First Intermediate People’s Court is final and conclusive.
13.After the incident between W and H on 9th August 2014, W started dating her current boyfriend since December 2014 and delivered their baby in December 2015 in Hong Kong. Since July 2015, she has relocated to Hong Kong. She now works in Hong Kong at a local company as a manager earning HK$45,000 per month.
14.On 17th January 2017, W lodged her present application for leave to make a Part IIA application.
Applicable Law and Principles
15.Section 29AB of Part IIA of MPPO provides that where a marriage has been dissolved or annulled, or the parties to a marriage have been legally separated, by means of judicial or other proceedings in a place outside Hong Kong, and the divorce, annulment or legal separation is recognised as valid by the law of Hong Kong, either of the parties to the marriage may apply to the court for an order for financial relief, which is what W now seeks to do.
16.There is however a filter mechanism under section 29AC to regulate the making of such application:
“(1) No application for an order for financial relief may be made unless the leave of the court has been obtained in accordance with rules of the court.
(2) The court must not grant leave unless it considers that there is substantial ground for the making of an application for an order for financial relief.
(3) The court may grant leave under this section despite the fact that an order has been made by a competent authority outside Hong Kong requiring the other party to the marriage to make any payment or transfer any property to, or for the benefit of, the applicant or a child of the family.
(4) Leave under this section may be granted subject to any conditions the court thinks fit.”
17.Section 29AE also sets out the jurisdictional requirements:
“The court has jurisdiction to entertain an application for an order for financial relief if any of the following requirements is satisfied –
(a) either of the parties to the marriage was domiciled in Hong Kong –
(i) on the date of the application for leave under section 29AC; or
(ii) on the date on which the divorce, annulment or legal separation obtained in the place outside Hong Kong took effect in that place;
(b) either of the parties to the marriage was habitually resident in Hong Kong –
(i) throughout the period of 3 years immediately before the date of the application for leave under section 29AC; or
(ii) throughout the period of 3 years immediately before the date on which the divorce, annulment or legal separation obtained in the place outside Hong Kong took effect in that place; or
(c) either of the parties to the marriage had a substantial connection with Hong Kong –
(i) on the date of the application for leave under section 29AC; or
(ii) on the date on which the divorce, annulment or legal separation obtained in the place outside Hong Kong took effect in that place.”
18.In addition section 29AF imposes a duty on the court to consider whether Hong Kong is the appropriate venue for the application:
“(1) Before making an order for financial relief, the court must consider whether in all the circumstances of the case it would be appropriate for the order to be made by a court in Hong Kong, and if the court is not satisfied that it would be appropriate, the court must dismiss the application.
(2) The court must in particular have regard to the following matters –
(a) the connection that the parties to the marriage have with Hong Kong;
(b) the connection that those parties have with the place where the marriage was dissolved or annulled or where they were legally separated;
(c) the connection that those parties have with any other place outside Hong Kong;
(d) any financial benefit that the applicant or a child of the family has received, or is likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or the operation of the law of a place outside Hong Kong;
(e) if an order has been made by a competent authority outside Hong Kong requiring the other party to the marriage to make any payment or transfer any property to, or for the benefit of, the applicant or a child of the family –
(i) the financial relief given by the order; and
(ii) the extent to which the order has been complied with or is likely to be complied with;
(f) any right that the applicant has, or has had, to apply for financial relief from the other party to the marriage under the law of any place outside Hong Kong and, if the applicant has not exercised that right, the reason for that;
(g) the availability of any property in Hong Kong in respect of which an order for financial relief in favour of the applicant may be made;
(h) the extent to which any order for financial relief is likely to be enforceable;
(i) the length of time that has elapsed since the date of the divorce, annulment or legal separation.
19.The leave application must also follow the procedure prescribed by Rule 103A of the Matrimonial Causes Rules (“MCR”) as follows:
(1) An application for leave to apply for an order for financial relief under section 29AC of MPPO must be –
(a) made ex parte by originating summons in Form27; and
(b) supported by an affidavit by the applicant stating the facts relied on in support of the application with particular reference to the matters set out in section 29AF of that Ordinance.
(2) The affidavit in support must give particulars of the judicial or other proceedings by means of which the marriage to which the applicant relates was dissolved or annulled, or by means of which the parties to the marriage were legally separated, and must state, so far as is known to the applicant –
(a) the names of the parties to the marriage and the date and place of the marriage;
(b) the occupation and residence of each of the parties to the marriage;
(c) whether there are any living children ofthe family and, if so, the number of the children and each child’s full names (including surname) and the date of birth or, if it be the case, that he or she is over 18;
(d) whether either party to the marriage has remarried;
(e) the full particulars of each party’s property and income; and
(f) the grounds on which it is alleged that the court has jurisdiction to entertain an application for an order for financial relief under section 29AB of the MPPO.
20.In C v H [2012], HKFLR 199, the very first case in which leave application was brought under section 29AC, Poon J (as he then was) very helpfully laid down the proper approach and guidance in his judgment for such leave application at p206:
“28. To obtain leave under section 29AC(2), the applicant must pass the threshold of satisfying the court that there is substantial ground for the making of the substantive application. Lord Collins explained the threshold in Agbaje v Agbaje thus:
’33. In the present context the principal object of the filter mechanism [that is, section 13 of Part III of the 1984 Act] is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse. The threshold is not high, but is higher than ‘serious issue to be tried’ or ‘good arguable case’ found in other contexts. It is perhaps best expressed by saying that in the context ‘substantial’ means ‘solid’. …’
I hold that the same threshold applies to section 29AC of Part IIA.
29. The applicant bears the burden of meeting the threshold: Z vZ (foreign divorce: financial provision) [1992] 2 FCR 152. In discharging the burden, the applicant must present before the court all the relevant facts in support. And the court will consider all the circumstances of the case to see if the burden is discharged. In this connection I wish to mention three points.
30. First, the applicant must satisfy one of the three formal jurisdictional requirements in section 29AE. This is obvious, if none of those formal requirements is satisfied, the court simply does not have jurisdiction to entertain the substantive application for financial relief. It would be clearly wrong for the court to grant leave.
31. Second, the applicant must also satisfy the court that provisionally it would be appropriate for the order to be made by a court in Hong Kong under section 29AF. This point needs further explanation.
32. Under section 29AF(1), the court is under a duty to consider at the substantive hearing whether Hong Kong is the appropriate venue for the application for financial relief. The English courts have consistently taken into account the criteria set out in section 16 of the 1984 Act (the English equivalent of section 29AF of Part IIA) and the relevant circumstances in considering leave. As explained in Rayden and Jackson on Divorce and Family Matters, 18th Edition, para 26.10:
‘The duty imposed under the MFPA 1984, s 16 to consider at the substantive hearing whether England or Wales is the appropriate venue for an application for financial relief is a matter for consideration at the leave stage. If on the application for leave to apply it is clear that if leave were given the application must founder at the first hurdle of s 16(1), then it would clearly be wrong for the court to grant leave to apply in the first instance.’
33. At the leave stage, the court cannot and will not come to a definitive view if Hong Kong is the appropriate venue. Therefore it should be sufficient if the applicant can establish, provisionally, that Hong Kong is the appropriate venue in order to pass the threshold for obtaining leave.
34. Now, in considering section 29AF(1), the court is required to have regard to the factors listed in section 29AF(2). And many of the factors are common with those which would be relevant in a forum non conveniens inquiry. Before Agbaje v Abaje, when considering the section 16(2) factors in the 1984 Act, the English authorities had demonstrated a consistent approach of refusing leave where a foreign court was, or had been, seized of the matter on the ground that comity required that foreign orders should be recognized and respected and forum shopping should be discouraged: see Rayden, supra, para 26.11. This is no longer the law after Agbaje v Agbaje, which held that the forum conveniens and stay principles are not engaged in Part III cases. As Lord Collins expounded:
’49. But the forum non conveniens principles were developed to deal with cases in which it was necessary to decide, which of two jurisdictions was the appropriate one in which proceedings were to be brought. Section 16 does not impose a statutory forum non conveniens test. It does not require the court to determine the only appropriate forum where the case may be tried more suitably for the interests of the parties and the ends of justice. No choice between jurisdiction is involved. The whole basis of Part III is that it may be appropriate for two jurisdictions to be involved, one for the divorce and one for ancillary relief.
50 The next question is whether principles of comity will add anything useful to the analysis. ……
51 First, comity is sometimes used not simply in the sense of courtesy to foreign states and their courts, but also in the sense of rules of public international law which establish the proper limits of national legislative jurisdiction in cases involving a foreign element. In that sense it will be contrary to comity for United Kingdom legislation to apply in a situation involving a foreign country when the United Kingdom has no reasonable relationship with the situation. This is not the case here. There is nothing internationally objectionable in legislation which gives a court power to order financial provision notwithstanding a foreign decree of divorce, whether or not the foreign court has ordered financial provision, provided that the forum has an appropriate connection with the parties or their property. The whole point of the factors in section 16(2) is to enable the court to weigh the connections of England against the connections with the foreign jurisdiction so as to ensure that there is no improper conflict with the foreign jurisdiction. That is why in Holmes v Holmes [1989] Fam 47, 53, Purchas LJ was right to note that section 16 reflected the principles of comity as between competent courts.’
35. Third, while Part IIA aims at remitting the presence of a failure in a foreign jurisdiction to afford appropriate financial relief, the statutory test does not require the applicant to prove hardship, injustice or exceptionality as a pre-condition in order to obtain leave: Jordan v Jordan [2001] 1 WLR 210; approved inAgbaje v Agbaje, per Lord Collins at paras.60-64. Such factors, if present, are cogently relevant to the court’s consideration for granting leave. Their absence is however not fatal. But it does not mean that whenever a spouse is dissatisfied with the financial provision obtained in a foreign jurisdiction, he or she should be encouraged to apply for further financial relief under Part IIA. Part IIA does not give the spouse a free ticket to do so. He or she should take heed of what Lord Collins said in Agbaje v Agbaje:
’65. But equally it is not the intention of the legislation in England and Wales to allow a simple ‘top-up’ of the foreign award so as to equate with an English award. …’
His Lordship then went on to explain the point by distinguishing Part III of the 1984 Act from the Scottish provisions and observed:
’70 … Instead a more flexible approach was deliberately adopted. There will be some cases, with a strong English connection, where it would be appropriate to ask what provision would have been made had the divorce been granted in England. There will be other cases where the connection is not strong and a spouse has received adequate provision from the foreign court. Then it will not be appropriate for Part III to be used simply as a tool to ‘top-up’ that provision to that she would have received in an English divorce.’
He later reiterated:
’72 It is the purpose of Part III to allow a spouse (usually, in current conditions, the wife) with some English connections to make an application in England to take advantage of what may well be the more generous approach in England to financial provision, particularly in so-called big-money cases. There is no condition of exceptionality for the purpose of section 16, but it will not usually be a case for an order under Part III where the wife had a right to apply for financial relief under the foreign law, and an award was made in the foreign country. In such cases mere disparity between that award and what would be awarded on an English divorce will certainly be insufficient to trigger the application of Part III. …’
36. Any intended applicant should firmly bear these judicial observations in mind and think through his or her case very carefully before commencing proceedings under Part IIA.”
21.It was with these guidance in mind that I considered and granted the leave application on the following basis and reasons.
Discussion& Application
22.First, as far as the jurisdictional requirements under section 29AE is concerned, W submitted that the jurisdiction of a Part IIA application can be established on either party’s domicile, habitual residence, or substantial connection in Hong Kong, either at the time of the Part IIA application or the date of the divorce took place in the foreign jurisdiction.
23.W now relies on her substantial connection to Hong Kong at the time of her present application. W’s case is that in December 2014, W started dating her current boyfriend and was found pregnant with his child. As a result, she left her employment with Tsinghua University in July 2015 and gave birth to her child in Hong Kong in December 2015 and decided to raise her child in Hong Kong.
24.Since October 2016 onwards, she was able to secure employment as a manager focusing on corporate development with a local company and her present salary is about HK$45,000 per month.
25.W has shown to my satisfaction that she had a substantial connection with Hong Kong up to the time of her application.
26.The Applicant has also provisionally demonstrated to my satisfaction that Hong Kong is the appropriate venue for an order for financial relief to be made by a court in Hong Kong under section 29AF(2) having regard in particularly to those matters stipulated therein, conveniently adopting the same approach of His Lordship in C v H as follows:
(1) 29AF(2)(a) - Connection with Hong Kong: W submitted and I accepted that her substantial connection with Hong Kong is not to be challenged as she now works and raises her child here since late 2015. Further, the parties have conducted part of their marriage and their cohabitation prior to the marriage in Hong Kong from February 2009 until January 2012 before H took up an offer to work in Beijing).
Evidence showed that H was working in Beijing between January 2012 to July 2013, however, he still maintained his connection with Hong Kong by frequent visits to Hong Kong and residing at the matrimonial home during his stay.
In fact, deputy District Judge A Yim had previously found that the parties effectively maintained two homes, one in Hong Kong and one in Beijing, and they chose to live where they worked. It is H’s own evidence that after he relocated back to Hong Kong in August 2013, he wanted W to resign her job in Hong Kong and move back to Hong Kong to live with him in the matrimonial home.
W’s case is that the matrimonial home in Hong Kong together with their other assets and liabilities in Hong Kong (i.e. all the parties’ properties in Hong Kong) form the subject matter that the PRC proceedings refused/failed to deal with and which W invites this Court to dispose of or adjudicate on under her Part IIA application.
(2) 29AF(2)(b) - Connection with Shanghai: While it is true that both parties came from Shanghai where their immediate family still resides, however W submitted that she had no idea where H was staying, living or working now, whereas W now had very little connection with Shanghai.
Now the divorce was pronounced in Shanghai. As both H and W has exhausted all their legal challenges in the PRC, my view is that neither would have any further connection with Shanghai arising out of the divorce or related litigation.
(3) 29AF(2)(c) - Connection with other place: There is no evidence to suggest that either party has any connection with anywhere else.
(4) 29AF(2)(d) - Any financial benefit obtained or obtainable outside Hong Kong:W submitted that other than an order that W shall receive RMB32,500, being half of the value of a Toyota vehicle in the PRC, the PRC Judgment makes no other order for financial provisions or dispose of the parties’ assets and liabilities in Hong Kong.
Even though the aforesaid sum has been due since July 2016, the same has yet to be settled by H. My view is that it is significant that the PRC Judgment makes no other order for financial provisions or dispose of the parties’ assets and liabilities in Hong Kong, and that no periodical payment is obtainable in the present case in the PRC Proceedings.
(5) 29AF(2)(e)– Any order by a foreign authority: As noted above other than dissolving the marriage and an order that W shall receive RMB32,500 as stated, the Shanghai Court has made no other order whatsoever for financial relief for either H or W.
(6) 29AF(2)(f)– Any right to apply for financial relief outside Hong Kong: The PRC Courts had refused to deal with any Hong Kong landed property, vehicle, properties, bank loans and debts and so on in Hong Kong. This decision of Shanghai Changning People’s Court was upheld in the appeal to the First Intermediate People’s Court. Shanghai High People’s Court also refused to consider H’s further application for review of the decision of the First Intermediate People’s Court.
My view is that W had exhausted all avenues of litigation in the PRC as the appeal decision of the First Intermediate People’s Court is final.
(7) 29AF(2)(g)– Availability of property in Hong Kong: Assets in Hong Kong are of substantial value and the PRC Courts refuse to deal with them. W submitted that at the very least, the matrimonial home in Hong Kong is now valued at about HK$7.5million and there is also a BMW vehicle with license plate number NJ8071 worth about HK$250,000, and that H also has bank accounts in Hong Kong worth at least HK$1 million at the time of the proceedings in Shanghai. He also placed a large amount of funds into a food chain and pub located in Hong Kong as shareholder.
I agree that counting the matrimonial home alone, the asset in Hong Kong is substantial. The marriage lasted for six years including the period of cohabitation. W’s case is that she is looking at an equal split of the matrimonial home as her starting point.
W submitted that the threshold for leave is not a high one. Leave ought to be granted where there is substantial ground/basis to advance a Part IIA application, and that she is not required to go all the way to show that there is a chance of her succeeding in the Part IIA application.
Evidentially, W is only required to show a case provisionally, and I am satisfied that W had demonstrated to my satisfaction.
(8) 29AF(2)(h)– Enforceability of any financial order: There is no question of enforcing any order for financial relief in Hong Kong as H is a Hong Kong Permanent resident and holding Hong Kong Passport and the matrimonial home is located within the jurisdiction.
(9) 29AF(2)(i)– Lapse of time since divorce: The Shanghai Court dissolved the marriage and delivered its judgment in February 2016. H appealed to the Shanghai First Intermediate People’s Court and his appeal was dismissed in June 2016.Subsequently, H attempted to lodge an application to review the dismissal.
However, it was refused by Shanghai High People’s Court on 18th December 2016. W lodged her present application for leave on 17th January 2017. I accept that there is no lapse of time or delay in the present case.
27.W submitted that the facts in the present case strike a very great extent of similarity with that in TJ v XGM, therefore leave should be granted to W to advance her Part IIA application.
28.As in the case of C v H supra, but for the PRC Proceedings and the subsequent dissolution of the parties’ marriage by the Court in PRC, no doubt W would have been able to continue with her Hong Kong divorce proceedings and her application for financial relief in the usual manner in Hong Kong.
29.It is true that substantial assets had been involved including a matrimonial home, the bulk of the matrimonial assets (which is in Hong Kong) can only be dealt with by the Hong Kong Court, and that whatever issues or disputes between them over these assets, they can now only be dealt with by the Hong Kong court since the Court in PRC had not done so.
30.Hence the only option left for W is to take out proceedings under Part IIA.
31.It is for all these reasons that I granted leave to Wwith direction to fix a hearing for her Part IIA proceedings with costs of this application be reserved.Lastly, I thank counsel for her assistance.
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David C. W. Cheung
Deputy District Judge
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Representation:
Ms. Anita Yip SC instructed by Ip & Heathfield for the Applicant
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