Lwk v. Zqj
Read the full judgment text of FCMC 6391/2016 on BabelCite. This Family Court judgment was delivered on 31 July 2018 before Her Honour Judge Grace Chan.
Matrimonial Causes Ordinance – forum non conveniens – anti-suit injunction – submission to jurisdiction – ancillary relief – divorce proceedings – PRC proceedings – stay of proceedings – forum-shopping – costs – Husband filed divorce petition in Hong Kong, then commenced ancillary relief proceedings in Shenzhen. Husband sought stay of Hong Kong proceedings claiming Shenzhen is more convenient forum. Wife sought anti-suit injunction to restrain husband from continuing Shenzhen proceedings. Whether husband can challenge forum after submitting to jurisdiction – No. Whether anti-suit injunction should be granted – Yes. Stay application dismissed. Anti-suit injunction granted. Husband bears wife's costs.
Legal issues: Forum non conveniens · Anti-suit injunction
Outcome: Stay application dismissed; Anti-suit injunction granted.
Cites 8 cases
|
FCMC 6391 /2016 [2018] HKFC 117 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 6391 OF 2016 ----------------------------
------------------------
------------------------------------- JUDGMENT ------------------------------------- Introduction 1.The petitioner (“husband”) filed his petition for divorce with the family court of Hong Kong on 26 May 2016, relying on the fact that he started to separate from the respondent (“wife”) since or about 2011 and seeking ancillary relief, including transfer of the matrimonial home. Decree absolute was granted by this court on 27 January 2017. 2.After decree absolute was granted, nevertheless, he commenced another set of proceedings on his ancillary relief matters against the wife in the People’s Court of Nanshan district, Shenzhen, China (深圳市南山區人民法院) on 21 March 2017 (“2017 PRC Proceedings”),[1] which triggers 2 applications now before me for determination:
3.Originally, both summonses were set down for argument to take place on 13 December 2017. On the return day, the wife (acting in person) said that she had not received the husband’s written submission, which was conceded by the husband through his counsel, Mr Austin Yiu, as the same was only sent out to her at her PRC address on/about 6 December 2017. She added that her legal aid application and its related appeal was refused and that she did not have sufficient fund to engage lawyers, due to the fact that all her assets have been frozen as a result of the husband’s various legal actions taken against her in the PRC, including the 2017 PRC Proceedings. She sought an adjournment so that she could have sufficient time to raise fund to engage her lawyers. On that occasion, Mr Yiu very fairly consented to an adjournment. 4.The argument was refixed to 4 May 2018. The wife was finally able to engage a solicitors’ firm to represent her. A notice to act was filed on 19 April 2018. However, due to some mis-communication between her lawyers and the registry of the family court, her legal team was not able to conduct a file search into this case in order to get hold of all the papers before 4 May 2018. As a result, her counsel appearing in that hearing, Mr R Poon, was not in the position to prepare for the argument. He sought an adjournment and offered to pay costs of that hearing to the husband. Mr Yiu, again appearing for the husband, submitted that if an adjournment was granted, he would ask for another hearing for substantial argument. 5.At the end of the hearing of 4 May 2018 and with a view not to waste further time and costs, I directed that both summonses shall be dealt with by paper disposal and the deadline for written submission/submission in reply was fixed for 25 May 2018. Background and litigation history 6.Unless otherwise stated, the following is a brief background of the parties and case history. 7.The husband is a Hong Kong citizen and now aged about 60. The wife was originated from the PRC but has since 2009 obtained citizenship of Hong Kong. She is now about 50 years old. 8.The couple have known each other since 1996, and started a relationship since 1998. They were married in April 2005 in the PRC. This is not their first marriage. They each have a daughter, now already an adult, born within their respective previous marriages. There is no child born within the wedlock of this marriage. 9.According to the petition, they lived together in the matrimonial home in Shenzhen. It is a duplex apartment occupying Rooms 702 and 802, both of which were purchased in 2004 and registered in the sole name of the wife (“Matrimonial Home”).[2] The husband alleges that the source of fund of purchasing the Matrimonial Home was from him. More will be said about the Matrimonial Home later in this judgement. 10.As said, the parties started to live apart since mid-2011. Each puts forward a different story for the separation, which is of no relevance in this judgement. What is not in dispute is that before their separation, the parties ran at least 3 companies limited in Hong Kong, as suppliers to major supermarkets in Hong Kong (“HK Companies”). These 3 HK Companies, according to a shareholder agreement made in 2009, are owned equally among the parties and the husband’s sister (each holding 1/3 of the shares). 11.The wife claims that businesses of the HK Companies were then very good and it was decided in/about 2011 that they should expand their businesses to Shenzhen, so that she should focus on the Shenzhen business while the husband and his sister on the HK Companies. At first, the operating funds of the Shenzhen business was transferred by the husband from the HK Companies to her in Shenzhen. However, the Shenzhen business was not developing as well as expected, but the husband no longer agreed to transfer/inject further funds into the Shenzhen business. Instead, he suggested that the wife could mortgage the Matrimonial Home to raise fund for the Shenzhen business. Since 2013, she alleges, she was not allowed to take part in the sales and management of the HK Companies, nor was she allowed to have access to their accounting documents.[3] 12.On the other hand, the husband alleges that in March 2016, the wife sent a few men to threaten him and force him out of the Matrimonial Home, which he left in April 2016.[4] 13.On 13 April 2016, upon his application by way of an ex-parte affirmation of 1 April 2016, leave was granted to dispense with the need for him to file an original marriage certificate when he filed his petition for divorce in the family court of Hong Kong. Despite so, he did not file his petition for divorce with the family court right away. 14.Rather on or about 15 April 2016, he chose to commence a family dispute case in the People’s Court of Nanzhan District, Shenzhen seeking a declaration from the PRC court that he had joint interest in the Matrimonial Home and a freezing order restraining the wife from unilaterally selling or mortgaging the Matrimonial Home (“2016 PRC Proceedings”).[5] Accordingly, a freezing order was granted by the PRC Court on 22 April 2016 to frozen the wife’s assets, including the Matrimonial Home. 15.It is the husband’s allegation that the wife drew various loans by pledging the Matrimonial Home without his knowledge and hided the money away. 16.He alleges that in/about May 2015, he received a telephone call from Shanghai Ping An Bank (上海平安銀行) and came to learn that the wife had pledged the Matrimonial Home for raising a loan of about RMB2,960,000, but she had failed to repay the loan within 1 year. 17.Then, on 18 May 2016, it was said that the husband received a telephone call from a Shenzhen finance company (中科諾小額貸款有限公司). The finance company said that the wife had pledged the Matrimonial Home to them for the sum of RMB3,500,000, among which RMB2,960,000 was already paid by the finance company to Shenzhen Ping An Bank to pay off the wife’s loan of RMB2,960,000, so that the title deeds of the Matrimonial Home would be released. The original plan was that the title deeds would be delivered to Shenzhen Xing Ye Bank (深圳興業銀行) to secure a loan of RMB4,500,000 to the wife, among which RMB3,500,000 would be utilised to pay back the loan of the finance company. The finance company explained that at the time when it paid RMB2,960,000 to Shenzhen Ping An Bank to pay off the wife’s loan of RMB2,960,000, they had no idea that the wife was married to the husband and that the property involved was a matrimonial home, because she presented a certificate from the marriage registry of Hong Kong showing that she was a single woman. The finance company went on to explain that a few hours after the said loan of RMB3,500,000 was paid out on 22 April 2016, they then found out that a court order was granted to freeze the Matrimonial Home pursuant to the 2016 PRC Proceedings. As a result, the loan arrangement with Shenzhen Xing Ye Bank could not go ahead and the finance company was unable to collect the said sum of RMB3,500,000 as planned. The husband was told that if this matter could not be solved, the finance company would have to sue him and the wife together. According to PRC law, the debts and liabilities owed to the bank(s) and incurred during marriage are jointly liable by the married couple. 18.Apart from the loan from the Shenzhen finance company, the wife also obtained a loan of RMB485,000 from a Mr Wang, the person in charge of the aforesaid Shenzhen finance company. 19.Against the above backdrop, the husband filed his petition for divorce at the family court of Hong Kong on 26 May 2016 and prayed in the petition for ancillary relief, including a property transfer order of the Matrimonial Home. 20.Pausing here, it should be noted that in the said petition and/or any other documents filed by the husband so far, he has not revealed to the family court of Hong Kong that he had commenced the 2016 PRC Proceedings. [6] 21.The trial of the 2016 PRC Proceedings took place on 21 June 2016, after which a judgment was handed down by the PRC court on 24 August 2016. The husband lost his claim, on the ground that there was no law or regulation in the PRC providing that a spouse may have his/her name added to the property certificate (房產證) unless with the consent of the other spouse. He lodged an appeal to this PRC judgment.[7] 22.On 3 November 2016, the parties first appeared before me in the first appointment hearing. The husband was legally represented, but the wife was acting in person. Importantly, the husband reinforced to this court that he had ancillary relief claim against the wife whose major assets were in the PRC. Yet he chose to continue to remain totally silence of the 2016 PRC Proceedings, its judgment and his intended appeal to that judgment. At the end of this hearing, I gave directions for filing of Form Es. 23.The husband filed his Form E on 24 November 2016, in which he confirmed again that he had claim for ancillary relief in Hong Kong. 24.Decree nisi was granted by me on 9 December 2016, which was made absolute on 27 January 2017. 25.The judgment of the appeal of the 2016 PRC Proceedings was handed down on 23 March 2017. The husband’s appeal was dismissed. It follows that the freezing order of the Matrimonial Home has to be discharged. 26.Four days later on 27 March 2017, the husband commenced the 2017 PRC Proceedings, seeking ancillary relief against the wife. In his civil claim statement (民事起訴狀), he says that the assets available for sharing include, inter alia, the following:
27.In the same statement of claim, the husband claims that the district court of Hong Kong SAR, in trying the divorce case of the parties, has not dealt with the assets and liabilities set out in his civil claim statement (「香港特別行政區區域法院在審理原告和被告離婚案件中，并未對上述財產和債務作出處理」). Pertinently, the family court of Hong Kong is handling his ancillary relief claim and is in the process of various first appointment hearings on the ancillary relief matters. It is rather misleading, in my view, to describe that the Hong Kong court “has not dealt” with their assets and liabilities. 28.Despite the fact that the husband has started the 2017 PRC Proceedings in March 2017, for reason(s) better known to himself, he took out a summons for stay of the Hong Kong proceedings almost 4 months later, ie on 12 July 2017. 29.On 26 July 2017, the wife took out her application for anti-suit injunction in respect of the 2017 PRC Proceedings, returnable before me on 8 August 2017. On the undertaking of the wife that she shall maintain the financial status quo of all her assets, and shall not sell, rent out, mortgage or cause any encumbrances to these assets unless with the written consent of the husband or leave of this court (“Undertakings”), I grant an interim anti-suit injunction pending determination of both summonses (“Interim Injunction Order”). Judgment in the 2017 PRC Proceedings 30.In the hearing of 4 May 2018, Mr Yiu for the husband informed this court of the latest position of the 2017 PRC Proceedings. The PRC court already heard the case and judgment was reserved, partly because the parties have not provided the value of certain assets, such as the Matrimonial Home, to the PRC court (presumably due to the interim injunction made by me on 8 August 2017), and partly because the PRC court is waiting for the outcome of the Hong Kong proceedings. 31.However, in the course of preparing this judgment, the PRC court handed down its judgment in the 2017 PRC Proceedings on 4 July 2018. In gist, the PRC court ruled that the wife’s insurances and pension balances shall be shared equally between the parties. Apart from expressly rejecting the husband’s claim that the wife owned Run Yuan Apartment (潤園公寓), Shenzhen and a flat in Tianjian, the PRC court does not make any express finding or capital distribution in respect of the other assets claimed by the husband. 32.The husband is obviously not satisfied with this PRC judgment. On friday of 20 July 2018, ie more than 2 weeks after the said PRC judgment was handed down, he sought an urgent hearing with the duty judge of the family court in Hong Kong to discharge the Interim Injunction Order, on the ground that he would wish to appeal this PRC judgment, the deadline of which falls on 3 August 2018. His application was refixed before this court for 26 July 2018.[8] 33.Upon hearing a brief submission from the parties, I summarily dismissed the husband’s application with costs to the wife. There is no appeal in respect of this summary decision up to the date of this judgment. 34.Subsequent to the said PRC judgment of 4 July 2018, there is no application from either party to file further evidence or to make further written submission. The husband’s case 35.In a nutshell, the husband says that the Hong Kong proceedings should be stayed because the PRC courts are more appropriate and convenient forum to determine the ancillary relief matters between the parties, due to the following major reasons:
36.The husband opposes to the wife’s application for anti-suit injunction. Not only does he reiterate that the PRC courts are more appropriate forum to handle their ancillary relief matters due to reasons stated above, but he also stresses that the 2017 PRC Proceedings are vital in preserving the family assets, especially the Matrimonial Home, as it is his belief that the wife orchestrated the loan arrangement of RMB2,960,000 from the Shenzhen finance company and RMB485,000 from Mr Wang, by pledging the Matrimonial Home without his prior consent/knowledge, and transferred these loan amount to somewhere else for the purpose of dissipation or concealment of the family assets. 37.On the point of preservation of the assets in the PRC, the husband is of the view that the Undertakings given by the wife to this court cannot ease his worries, as she is not a trust-worthy person. In order to get the loans from the Shenzhen finance company, she has lied that she is still a single woman by tendering a certificate from the Hong Kong marriage registry. 38.If he is restrained from continuing with the 2017 PRC Proceedings, the wife can flee with her concealed assets, with nothing worthwhile left for him but liabilities of these loans, because according to the PRC law, liabilities during marriage are jointly borne by the couple. The wife’s case 39.In opposition to the husband’s application for stay of the Hong Kong Proceedings, the wife is adamant that Hong Kong is a more convenient forum because:
40.As to her application for an anti-suit injunction, she deposes that she believes in the legal system of this jurisdiction and that the court will make a fair decision in their ancillary relief matters. She repeats that the husband is using the 2017 PRC Proceedings to frozen her assets, including the Matrimonial Home and to sabotage her financially. Challenge on forum 41.Usually, when forum is in issue, the challenge is invariably taken up by the defendant/respondent of a case, in arguing that the claim initialled by the plaintiff/petitioner should not have been proceeded in this jurisdiction but should be conducted in another more convenient and appropriate foreign jurisdiction. The peculiar facts of this case is that it is the husband (as the petitioner) who has invoked the jurisdiction of this court, but it is also he himself who now argues that Hong Kong is not a convenient and appropriate forum. 42.Since his application for stay of the Hong Kong proceedings is premised on the argument on forum non conveniens, counsel for the respective parties centre their written submission on the legal principles and argument for/against forum non conveniens, including the well-known legal principles set out in the case of Spiliada Martime Corp v Cansulex Ltd [1987] AC 460, which also apply to matrimonial cases (See: DGC v SLC (nee C) [2005] 3 HKC 293; SPH v SA [2014] 3 HKLRD 497). 43.Merely for the sake of completeness, I set out the relevant paragraphs in SPH v SA (supra) where the Court of Final Appeal summarised the relevant legal principles and the 3-stage test on forum non conveniens:
50.Upon considering all the affirmations and written submission, however, I hold the view that the foremost and ultimate question to decided is this: whether it is still open for the husband to challenge that the courts of this jurisdiction is not proper and convenient to try his ancillary relief claim, and to argue that the PRC courts are more convenient and appropriate forum. To answer this question, the following undisputed and/or indisputable facts should be noted. 51.Firstly, in order to comply with the jurisdictional requirement under section 3 of the Matrimonial Causes Ordinance, the husband pleads in the petition that he is “domiciled” in Hong Kong. Requisition was raised on the issue of domicile because the husband provided a PRC address in the petition. By an affirmation dated 20 June 2016, he clarified and deposed that since he was deployed by his employer to work in Shenzhen, he has been living there since 2000. However, his immediate family is all in Hong Kong. He has no intention to leave Hong Kong permanently and will return to stay in Hong Kong when he cannot find any suitable job in the PRC. As a result of his affirmation, I accepted that the jurisdiction of this court could be invoked in favour of the husband. 52.Secondly, nowhere in his petition, Form E or other documents filed with this court (before his application for stay of proceedings) does he indicate or argue that Hong Kong is not a proper and convenient forum to deal with his ancillary relief claim, or that he plans or wishes to segregate the main suit from his ancillary relief claim by issuing separate legal proceedings for his ancillary relief claim in the PRC. 53.Thirdly, having deposed by an affirmation that this court has the requisite jurisdiction to deal with his divorce, the husband actively participated in the case and more particularly in his claim for ancillary relief against the wife. 54.In his petition, he sought ancillary relief, including a property transfer order in respect of the Matrimonial Home. 55.On his own motion, he sought a first appointment hearing of the ancillary relief matters in accordance with Practice Direction 15.11. And on that return day, he reiterated through his solicitors that he would seek ancillary relief in respect of the wife’s assets in the PRC. 56.In his Form E dated 23 November 2013, he asked that:
57.Fourthly, it cannot be disputed by the husband that he is all along well aware that the wife’s major assets and liabilities, ie the Matrimonial Home and the related loans, are not situate in Hong Kong. He was legally represented in the 2016 PRC Proceedings, as well as the 2017 PRC Proceedings. It is not moon-shining to say that he must have sought or been advised of the issue of enforcement of an order of Hong Kong courts in relation to any PRC assets. 58.In view of the above points, I am convicted to say that the husband has, by commencing the divorce proceedings in Hong Kong, voluntarily and unequivocally submitted to the jurisdiction of Hong Kong. He is well aware of the fact that the wife’s major assets, including the Matrimonial Home, are situate in the PRC. With such knowledge, he made repeated request in the Hong Kong proceedings for ancillary relief against the wife before the family court of this jurisdiction. It is now no longer open to him to argue that Hong Kong is not the proper and appropriate forum to try his ancillary relief claim. 59.In RKL v WL and BKT, FCMC 14906/2014, unreported 17 September 2015, Deputy Judge Adriana Tse Ching held that the petitioner wife had a substantial connection with Hong Kong and ruled against the respondent husband’s forum challenge primarily on the ground that the husband had submitted to the jurisdiction of Hong Kong courts, having filed a Form 4 indicating he had no intention to defend before his forum application was taken out. On appeal (CACV 9/2016, unreported 6 May 2016), the Court of Appeal upheld the deputy judge’s ruling on submission to jurisdiction. 60.Importantly, the husband there was found to have submitted to the jurisdiction of Hong Kong courts by merely filing a Form 4 indicating that he had no intention to defend the petition. Here and as I have said, the husband participated actively and unequivocally in the Hong Kong proceedings detailed as above. He has submitted to the jurisdiction of Hong Kong courts and there is no more room for him to challenge the forum. 61.As such, it is not necessary for this court to literally go through the 3-stage test summarised in SPH v SA (supra). But merely for completeness, I would give the following brief analysis. 62.It is the wife’s case that the PRC courts are not the appropriate forum to deal with the 3 HK Companies. Her case is that the HK Companies are of value of at least $4 million, and that the husband had diverted funds out of the HK Companies beyond her knowledge and reach. On this, the husband deposed that any court in any jurisdiction, such as the PRC courts, could deal with the 3 HK Companies. In my judgment, this is an overstatement of the husband, premised on the pre-condition that both parties can agree on the value of the HK Companies, which in the light of the case history, is more unlikely than not to achieve. This argument has also overlooked the wife’s case that he had diverted funds from the HK Companies, of which the wife would like to seek discovery. 63.Although the single joint expert report dated 16 March 2018 has not touched on the difference of the discovery process between the Hong Kong and PRC jurisdictions, it is, however, noted in a number of local authorities that the PRC jurisdiction does not have similar process of discovery as this jurisdiction (See: Shenzhen Futaihong Precision Industry Co Ltd & Anor v BYD Co Ltd & Ors, HCA 2114/2007, unreported 27 June 2008; Botanic Limited v China National United Oil Corporation, HCA 1852/2005, unreported 25 August 2008). 64.Notably, the husband has not expressly denied the wife’s affirmation evidence that he had drained away the money of the HK Companies.[9] 65.Under such circumstances and in view of the totality of all evidence so far, I come to the conclusion that even if (just assuming) that the husband was able to pass the hurdle of stage 1 on appropriateness of forum, the balancing exercise would tilt in the favour of the wife that she would be deprived of the juridical advantage if the ancillary relief matters were tried in the PRC jurisdiction in so far as the discovery concerning the HK Companies are concerned. 66.Hence, in whatever ways one looks at it, the husband’s application for stay of the Hong Kong proceedings is doomed to fail. Anti-suit injunction 67.The leading authority on anti-suit injunctions is Societe Nationale Industrielle Aerospatiale v Lee Kui-jak [1987] 1 AC 871, in which the English Privy Council sets out the following 4 fundamental and uncontroversial principles:
68.On behalf of the wife, Ms Isabel Tam of counsel, submits that it is the husband himself who has caused the multiplicity of proceedings in Hong Kong and in the PRC. He has not pointed to any prejudice that he would suffer in the face of an injunction against him for the prosecution of the 2017 PRC Proceedings. Rather, costs would be saved if there is one set of proceedings to take place in Hong Kong. It is therefore appropriate to grant the injunctive order in favour of the wife. 69.In response, Mr Yiu for the husband argues that even if this court does not grant an order to stay the Hong Kong proceedings, it does not necessarily follow that an anti-suit injunction against the husband to further participate in the 2017 PRC Proceedings should be granted. The court has to take into account the progress of the foreign proceedings (See: First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd, HCA 4414/2001, unreported 12 December 2002). Mr Yiu submits that the 2017 PRC Proceedings have already reached a very advanced stage and that the husband would suffer prejudice, if the Interim Injunction Order is to continue and to become a final injunctive order, because he would be unable to comply with the order of the PRC court for providing valuation of the Matrimonial Home. 70.In view of the chronology set out in the earlier parts of this judgment, there is no doubt in my mind that it is the husband who has orchestrated and caused the duplicity in having 2 sets of proceedings in 2 different jurisdictions but dealing similar subject matter(s), including the Matrimonial Home. It is clear to me that he is guilty of forum-shopping or forum-hopping, a practice which should not be endorsed by this court and thus should be restrained, in order to meet the ends of justice. His argument that he suffers prejudice of not being able to comply with the order of the PRC court is red herrings. I refuse to accept this line of argument. I conclude that a final anti-suit injunction should be ordered. Conclusion 71.I shall thus make the following order:
Mr Austin Yiu instructed by Yan Lawyers for the petitioner (husband) Ms Isabel Tam instructed by Ho & Associates for the respondent (wife) [1] Case number: (2017) 粵0305民初4884號. [2] It is revealed to the court that the property licence (房產證) of the Matrimonial Home records its address as Room 802 only, but it actually covers also Room 702. [3] The wife’s 1st appointment bundle dated 18/7/2017. [4] The husband’s 1st appointment bundle dated 27 March 2017. [5] Case number: (2016) 粵0305民初4290號. [6] See §6 of the petition. [7] Case number: (2016) 粵03民終22085號 [8] The urgent application came before the duty judge, because I was on leave between 13-22 July 2018. [9] Wife’s affirmation dated 18 August 2017 [60/§10] & husband’s affirmation dated 15 September 2017 [68/§7] | |||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 6391/2016