Csfk v. Hwh

CACV 318/2019

[2020] HKCA 207

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 318 OF 2019

(ON APPEAL FROM FCMC 15072/2013)

________________

________________

Before:  Hon Lam VP, Chu JA and B Chu J in Court

Date of Hearing:  6 April 2020

Date of Judgment:  6 April 2020

Date of Reasons for Judgment and Decision on Costs: 8 April 2020

________________________

REASONS FOR JUDGMENT

AND DECISION ON COSTS

________________________

Hon Lam VP (giving the Reasons for Judgment and Decision on Costs of the Court):

Introduction

1.On 15 August 2017, at a second FDR hearing, Deputy District Judge J Chow (“Judge”) ordered that a Chinese memorandum signed by the parties on 15 March 2017 shall be the parties’ agreement for the disposal of the ancillary relief (“the FDR Order”).  This is the petitioner’s appeal against the FDR Order.  The appeal was brought with the leave granted by the Judge on 27 June 2019.  The Notice of Appeal was served on 9 July 2019.

2.Since the commencement of the appeal, the parties (whom we shall refer to as wife and husband despite that decree nisi had been granted on 24 February 2015) had made 4 applications:

(a)  the petitioner-wife (“W”)’s application on 11 July 2019 for leave to appeal against the FDR Order on the additional grounds that (i) the Judge’s refusal to adjourn the hearing on 15 August 2017 infringed W’s right to legal representation and (ii) the FDR Order is vitiated by fraud, material non-disclosure and change of circumstances regarding the parties’ child’s medical needs.  The Judge had previously refused leave on those grounds (“W’s Leave to Appeal Application”);

(b)  W’s application on 11 July 2019 for leave to adduce fresh evidence in support of the intended appeal on the alleged fraud, material non-disclosure and the child’s medical needs (“W’s New Evidence Application”);

(c)  the respondent-husband (“H”)’s application on 29 July 2019 to set aside the Judge’s decision on 27 June 2019 granting leave to W to appeal against the FDR Order on the ground that the Court had no jurisdiction to make the FDR Order against W’s objection (“H’s Setting Aside Application”).  We shall refer to that ground as Ground 1;

(d)  H’s application on 29 July 2019 for leave to file an affirmation made by H’s former solicitors setting out its failure to properly handle W’s leave to appeal application (“H’s New Evidence Application”).

3.On 25 November 2019, the Court informed the parties that it would conduct a rolled-up hearing to address the applications and Ground 1 in the substantive appeal.  The Court indicated that it would hear H’s Setting Aside Application first.  If the Court decides against H, it will proceed to hear Ground 1 of the substantive appeal.  Depending on the outcome on the Setting Aside Application and Ground 1, the Court shall then address the other applications.  But it would not hear the substantive appeal on the other grounds even assuming that leave was granted for such grounds to be advanced pursuant to W’s Leave to Appeal Application.  In that event, the substantive appeal based on those other grounds would be heard on another occasion.

4.The rolled-up hearing was scheduled to take place on 6 April 2020.

VCF Hearing

5.Due to the public health risk arising from the COVID-19 pandemic, the Chief Justice has directed that all proceedings are generally adjourned with effect from 29 January 2020.  By further directions of the Chief Justice, the period of the general adjournment of proceedings (“GAP”) has since been extended continuously up to 13 April 2020.   

6.In order to facilitate the resolution of the appeal notwithstanding GAP, the Court issued directions to the parties on 25 March 2020 proposing different options to proceed.  By a joint letter of 30 March 2020, the parties through their solicitors agreed to conduct the hearing through video-conferencing facilities (”VCF”).

7.The Court is satisfied that it is permissible and lawful to conduct remote hearings through VCF.  Under the existing statutory frameworks governing civil proceedings in the High Court, there is no restriction against the conduct of hearing in such a mode.  Section 28(1) of the High Court Ordinance, Cap 4 (“HCO”) provides that the High Court shall sit at such places as the Chief Justice shall appoint.  Section 34B, which governs the exercise of its civil jurisdiction by the Court of Appeal refers to hearing or determining matters and arguments before the court.  So long as the judges are sitting in the High Court, there is no specific provision restricting the mode of receiving submissions and evidence of the parties.  Whilst normally a hearing will take place with all participants physically present in the courtroom, there is no rule prohibiting other modes of hearings if the dual requirements for fairness and openness are satisfied, see discussions below.

8.In the absence of an express restriction on the mode of hearings, whether VCF mode of hearing is permitted is a matter of construction of the phrases “hearing or determining”[1] or “heard and disposed of in court”[2] or “heard in chambers”[3] in the HCO.

9.As Order 1A Rule 2(2) of the Rules of the High Court, Cap 4A reminds us, the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.  Thus, the purpose of a court hearing is to ensure that the resolution of issues before the court is to be conducted in a mode which is fair and open.  These concepts are enshrined in article 10 of the Hong Kong Bill of Rights Ordinance, Cap 383 which is applied with constitutional entrenchment under Article 39 of the Basic Law.

10.Under the common law, it is often said that a judge is a master of one’s own court.  This means that a judge can, amongst other things, determine the mode of the hearing which takes place before him or her as it is a matter of case management.  This is reflected in Order 33 Rule 4(1) with regard to trial.  Subject to the requirements of fairness and open justice discussed below, the same common law principle applies with regard to proceedings other than trials.

11.The primary objective of a court hearing and the common law approach should inform us on the construction of the various phrases in the relevant statutory provisions in the HCO mentioned above.  Another relevant context is the other provisions in the rules made under HCO and the practice of the courts in processing civil businesses.     

12.There are actually provisions in our rules which envisage that court hearings could take place by the mode of paper hearing: see Order 59 Rule 14A(1); Order 59 Rule 2A(5)(a), (7) and (8); Order 32 Rule 11A(1)(a).  Further, it has also been held that with the consent of the parties or when a party fails to comply an unless order for filing skeleton submissions, an appeal or a matter can be determined by way of paper disposal: see Chung Sun Kwan v Bank of China (Hong Kong) Ltd CACV 233/3016, 22 September 2017 [7] and cases cited therein; Re Manjit Kaur [2018] HKCA 247.  

13.For interlocutory applications which are essentially procedural in nature (e.g. leave to appeal, stay of execution pending appeal, costs applications) this Court has held in Tsang Wing Kwai v Tsang Wing Fai [2018] HKCA 759 and ZJ v XWN [2018] HKCA 436 that the courts can direct those applications be processed on the papers.  Order 1A Rule 4(2)(j) directs the courts to consider actively managing the case by dealing with some aspects of it in such a way without requiring the parties to attend at court in order to achieve the underlying objectives set out in Order 1A Rule 1. 

14.It is also a well-established practice in our courts that in certain circumstances evidence can be taken through VCF: see Practice Direction 29.  In terms of the significance of physical appearance for the purpose of assessing matters in an adjudication process, amongst all the stages in the context of court process, evidence taking is probably on the top of the list.  If VCF mode is regarded as acceptable for the purpose of evidence taking, it is difficult to see the reason for barring such mode in hearings for other purposes.  Whilst it is correct that hitherto there is no Practice Direction on VCF hearing generally, it does not mean that this is not a permissible mode of hearing. 

15.Recently, Coleman J in Cyberworks Audio Video Technology Ltd v Mei Ah (HK) Co Ltd [2020] HKCFI 347 discussed the viability of telephone hearings in a non-controversial interlocutory setting.  At para 17, the learned judge concluded that physical attendance of all participants at one location is not mandated.

16.On the basis of the foregoing survey of the relevant law and practice in this jurisdiction, physical presence of the parties or their counsel in a courtroom for civil businesses is not indispensable.  The essential considerations are fairness and openness of the proceedings.  In addition, the facility for the keeping of an accurate and official record of the proceedings and the ability to ensure orderly proceedings to take place are important. 

17.Article 10 of the Hong Kong Bill of Rights Ordinance, Cap 383 provides:

“ All persons shall be equal before the courts and tribunals. In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. The press and the public may be excluded from all or part of a trial for reasons of morals, public order (ordre public) or national security in a democratic society, or when the interest of the private lives of the parties so requires, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice…”

18.In Chow Shun Yung v Wei Pih (2003) 6 HKCFAR 299 at [37], Ribeiro PJ examined the nature of the right to a hearing.  Further discussion can also be found in ST v Betty Kwan [2014] 4 HKLRD 277, at paras 22-29.  It is not necessary for us to go through these authorities at length in this judgment.  For present purposes, it suffices to reiterate that the essence of a fair hearing is that each party be given a proper opportunity to participate and be heard.  At its core, in our judgment, an opportunity to proper participation would require (a) a reasonable opportunity to be informed of the allegations and evidence adduced by the other party, (b) a reasonable opportunity to respond to such allegations and evidence, and (c) a reasonable opportunity to make effective submissions on the issues arising from such allegations and evidence.  The right to an opportunity to make worthwhile representations does not always require that there must be an oral hearing before a decision is made, much less that there must be a hearing at which all the parties and lawyers are present in the same physical location.

19.In our judgment, a VCF hearing will give parties through their counsel to address the court as effectively as an ordinary hearing.  The Guidance Note issued by the Chief Judge of the High Court on 2 April 2020 encapsulates the rationale for a VCF hearing at para 9 in these words:

“ Remote hearings using video technology preserve most of the benefits of an oral hearing, allowing parties and their legal representatives and the court to interact with each other on a real-time basis. Parties and their legal representatives will be expected to focus their submissions (and evidence, if applicable) so as to promote the efficient use of the technology within the shortest possible appropriate time. As even remote hearings may require some persons to be physically present in the same place, the duration of hearings should be limited to reduce public health risk to those present. All participants should keep in mind the wider public interest of maintaining social distancing as a strategy to combat the pandemic.”

20.As regards the right to public hearing, it is not engaged in hearings on “merely interlocutory or case management issues”, see Chow Shun Yung v Wei Pih at para 37.  In Micallef v Malta no.17056/06, 15 October 2009, the Strasbourg Court explained the circumstances under which an interim measure could effectively determine a civil right or obligation at stake so that the right would be engaged.

21.In the present appeal, we shall proceed on the assumption (without deciding so, as we do not need to) that the determination on the validity of the FDR Order engages the right to public hearing.  The principles of open justice were examined in ATV v Communications Authority [2013] 2 HKLRD 354, TCWF v LKKS CACV 154 & 166/2012, 29 July 2013 and Dring v Cape Intermediate Holdings Ltd [2019] 3 WLR 429. 

22.We have those principles on open justice in mind in our assessment of the lawfulness of the VCF mode of hearing.  The requirement of open justice is duly observed in a VCF hearing since at the hearing of 6 April 2020 members of the public and the public media are permitted to come to court to observe the proceedings.  In any event, the right will have to be balanced against the public interest in maintaining social distancing in light of the latest development of the COVID-19 pandemic.  Thus, the Guidance Note said at para 10:

“ Insofar as the conduct of remote hearings might impact the open justice principle, it is settled law that different balances may be struck with regard to different aspects of open justice being subject to restrictions when other competing fundamental rights are engaged. The court will be astute to ensure the appropriate balance is struck, for example by the continued public dissemination of reasoned decisions.”

23.And at para 28:

“ Subject to the direction of the Judge, a remote hearing will be conducted openly where public and media can attend physically. However, in the exceptional circumstances of the threat to public health caused by the current pandemic, the impossibility of public or media access to a hearing should not ordinarily prevent the remote hearing taking place. The decision whether, how, and to what extent, to permit public or media access to a remote hearing rests with the Judge conducting the hearing.”

24.One of the underlying objective in Order 1A Rule 1 of the Rules of the High Court, Cap 4A is to ensure that a case is dealt with as expeditiously as is reasonably practicable (O.1A, r.1(b)).  Active case management under Order 1A Rule 4(2)(k) includes the making use of technology.  Given the impediment to the usual mode of court hearing occasioned by the COVID-19 pandemic, there is an obvious need for the courts to deploy the use of technology to ensure prompt and safe conduct of proceedings.  VCF hearing is one possible solution.

25.Provided that an official accurate record can be kept for the hearing and integrity of the same being maintained, we cannot see any reason why the concepts of “hearing or determining” and “heard and disposed of in court” or “heard in chambers” in the High Court Ordinance cannot embrace the concept of a VCF hearing.  A party or legal representative addressing the Courts through VCF mode will be appearing in and attending a court hearing and subject to all regulations and constraints of a usual court appearance. 

26.Given that the VCF system currently used by the Courts can linked to our DARTS system, there is no problem in this regard.

27.Since our VCF system is a point to point connection, the Court can readily and effectively control the conduct of a hearing and there is no risk of disruption occasioned by outside parties.   

Background

28.H and W were married in 1989 with 2 daughters who were born in 2002 and 2013 respectively.  W is a housewife.  H is an investor in real estates.

29.In October 2013, W petitioned for divorce.  In September 2014, W was granted sole custody, care and control of the younger child.  In February 2015, a divorce decree nisi was granted.

30.The 1^st FDR hearing came before His Honour Judge Bruno Chan on 15 March 2017.  That hearing started at 10:39 am and ended at 4:32 pm.  No agreement was reached before the adjournment.  In the course of the hearing, a document was produced but it had not yet been signed as there were still some outstanding issues[4].  In light of the remaining differences between the parties, the judge urged the parties to continue negotiation in the court building to try to come up with a signed document within the day.  He also told the parties he had other engagement and therefore would not be able to deal with the matter.  The Court ordered the FDR hearing be “adjourned pending the parties to file a Consent Summons”.[5] There were negotiations after the adjournment of the 1^st FDR which resulted in H (who was not legally represented) and W (who was legally represented) signing a memorandum.

31.The Consent Summons as envisaged by Judge Chan did not materialize as W subsequently did not find the terms in the memorandum to be acceptable due to insufficient provision for children.  H had been informed by a letter from the solicitors for W on 20 March 2017[6].

32.In the meantime, a 2^nd FDR hearing was scheduled for 15 August 2017. 

33.Before that 2^nd FDR, the matter came back to Judge Chan again on 21 June 2017 because H took out a summons on 12 June 2017 seeking relief by way of enforcing the obligations to vacate the registration of Form A against a property pursuant to the terms of the memorandum.

34.At the hearing on 21 June 2017, both parties were unrepresented.  Judge Chan told the parties that the court had yet to approve any settlement as no consent summons had been lodged.  After learning of W’s position, Judge Chan explained to the parties that an agreement between the parties was not the same as a court order.  He urged H to continue to negotiate with W.  He indicated that the relief sought in the summons of 12 June 2017 could not be granted since no court order had been made. 

35.Due to the retirement of Judge Chan, the 2^nd FDR came before the Judge.  Unlike us, the Judge did not have the benefit of the transcripts of the hearings on 15 March 2017 and 21 June 2017.

36.At the 2^nd FDR hearing before the Judge on 15 August 2017, both H and W were not legally represented.  W sought to back out of the memorandum while H insisted that the parties had already reached settlement.  The Judge ordered, among other things, “(i) the memorandum as the parties’ settlement on ancillary relief claims (i.e. the FDR Order) and (ii) parties do submit a consent summons for approval; (iii) the 3^rd FDR be fixed pending parties’ submission of consent summons”.[7]

37.On 22 August 2017, W’s solicitors by letter[8] invited the Judge to review the FDR Order before it was drawn up and perfected given that, among other things, the memorandum failed to make any provision for the medical need of the younger child who was diagnosed as having “major depressive episode, generalised anxiety disorder, and obsessive compulsive disorder”.

38.On 29 August 2017, the 15 August 2017 order was sealed in Chinese.  Paragraph 1 (i.e. the FDR Order) reads:

“ 1. 於2017年3月15日聆訊（第一次解決財務糾紛聆訊）中遞交之備忘錄成為雙方解決附屬濟助的協議。”

39.On the following day, the Judge replied to W’s solicitors directing that they should issue an inter partes summons to fix a hearing date for W’s application.[9]

40.By a letter[10] to the Judge dated 26 October 2017, W’s solicitors queried whether W should challenge the FDR Order by way of commencing a fresh action or lodging an appeal, as opposed to issuing a summons. 

41.On 16 November 2017, W issued a summons to set aside the FDR Order and the memorandum.[11]  On 27 April 2018, Judge CK Chan dismissed the summons on the ground that the Family Court had no jurisdiction to entertain the application.

42.On 20 July 2018, W commenced an action in the Court of First Instance (HCA 1686/2018) to set aside the FDR Order and the memorandum (“the High Court Action”).[12] On 26 October 2018, H applied in the High Court Action to (i) strike out W’s claim to set aside the FDR Order and (ii) stay the High Court Action pending the determination of the matrimonial proceedings.[13]

43.On 17 April 2019, Master KW Wong acceded to the striking out application,[14] observing that the FDR Order was not a consent order and therefore should be challenged by lodging an appeal instead of bringing a fresh action.[15] However, the Master refused to stay the High Court Action.

44.On 30 April 2019, H lodged an appeal against the Master’s refusal to stay the High Court Action, which appeal is yet to be heard[16]. We were told by counsel that the appeal had been stayed pending the determination of the present appeal.

45.On 21 May 2019, W applied to the Judge for leave to appeal against the FDR Order out of time and to adduce new evidence.  The grounds of the intended appeal were:

(a)  the Judge had no jurisdiction to make the FDR Order against W’s will (“Ground 1”);

(b)  the Judge’s refusal to adjourn the hearing on 15 August 2017 infringed W’s right to legal representation (“Ground 2”); and

(c)  the FDR Order is vitiated by fraud, material non-disclosure and change of circumstances regarding the parties’ child’s medical needs (“Ground 3”).

46.In accordance with the practice laid down by this Court in ZJ v XWN [2018] HKCA 436, the inter partes leave application was processed on the papers.  H’s solicitors did not lodge any submissions in opposition notwithstanding notice of the automatic directions for processing leave applications had been given to him[17].

47.On 27 June 2019, the Judge handed down her decision:[18]

(a)  The Judge granted an extension of time to allow W to apply for leave.  He accepted that W has “made an effort to apply for setting aside” the FDR Order, that there are “valid reasons to explain the length of delay” and that no prejudice would be caused to H (para 22).

(b) The Judge granted leave to appeal in respect of Ground 1, but rejected Grounds 2 and 3 and W’s application to adduce new evidence (paras 28-32).

H’s Setting Aside Application

48.By the H’s Setting Aside Application, H wishes to set aside the leave to appeal granted by the Judge in respect of Ground 1.

49.H’s submissions can be summarised as follows:

(a)  W’s leave to appeal application to the Judge was late by 21 months.  W has no reasonable explanation for this delay; the fact that the delay was caused by her or her legal team’s mistake or incompetence in identifying the correct procedure to challenge the FDR Order is not an excuse.  This is especially so when W was already told by H’s counsel (in February 2018) and Judge CK Chan (at the hearing on 27 April 2018) that the proper procedure is to lodge an appeal against the FDR Order.  On this ground alone, the leave granted by the Judge should be set aside.

(b)  H has suffered irredeemable prejudice.  Delay alone is a prejudice as it disturbs H’s entitlement to treat the FDR Order as final.  Further, every dollar spent on wasted procedures means every dollar lost for the parties and the children to share.  Moreover, H has acted in reliance on the FDR Order by, for example, making payments to W pursuant to the memorandum. H has also incurred costs and time on removing the registrations against his properties and dealing with W’s challenges to the validity of the FDR Order.

(c)  W’s repeated failures to adopt the correct procedure to set aside the FDR Order constitutes a Henderson v Henderson abuse of process which warrants the setting aside of the leave granted by the Judge.

(d)  Even if leave is set aside, W will not be devoid of redress, as she can continue to pursue her claim to set aside the memorandum in HCA 1686/2018.  Also, given the extant HCA 1686/2018, it is impossible to implement the FDR Order even if it is not set aside.

50.W’s submissions can be summarised as follows:

(a)  The Court should not set aside the grant of leave to appeal “unless the appeal will inevitably fail”.  The chances of success of the appeal is therefore determinative of H’s Setting Aside Application.  Here, Ground 1 is meritorious and raises a novel and important issue.

(b)  W’s delay is excusable.  She has persistently tried to set aside the FDR Order since the very beginning.  It was reasonable for W to issue the summons to set aside the FDR Order in the Family Court since this was what the Judge directed.  It was also reasonable for W to commence HCA 1686/2018 since the present case bears some resemblance to Rose v Rose [2002] 1 FLR 978.  In any event, the Court should consider all the circumstances and the overall justice of the case, instead of fixating on the length and reasons for the delay.

(c)  The delay has not caused H any irreparable damage.  The alleged prejudice raised by H is all monetary in nature.  Also, H has all along been aware of W’s intention to set aside the FDR Order.

(d)  There is no Henderson v Henderson abuse. There is no basis for disbelieving W’s reasons for the delay.  Also, there is no reason for W to delay the proceedings since (i) W is the one taking care of the children, (ii) the overwhelming majority of the family pot is under the control of H and (iii) H has stopped paying interim maintenance of the children and W since 2017.

(e)  Even if W succeeds in setting aside the memorandum in HCA 1686/2018, the FDR Order will remain valid since a court order derives its power and authority from the court, not the memorandum.  Also, H has appealed against Master KW Wong’s decision not to stay HCA 1686/2018, which appeal is yet to be heard. 

51.In our judgment, H’s Setting Aside Application is without merit.

52.H has not obtained leave to appeal against the Judge’s decision and as a matter of jurisdiction and alternatively discretion, we do not find H to have made out a sufficient case for this Court to re-visit the grant of extension of time and leave to appeal on Ground 1 in the present circumstances:

(a)  The nature of H’s Setting Aside Application is somewhat unclear.  On one hand, the language of H’s summons[19] indicates that H is seeking to challenge the leave granted by the Judge.  On the other hand, certain parts of H’s written submissions[20] suggest that H is seeking to challenge the Judge’s decision to grant an extension of time to allow W to apply for leave. 

(b)  Even if it is a challenge to the grant of extension of time as opposed to the grant of leave to appeal, H must first seek leave to appeal pursuant to sections 63(1) and 63A of the District Court Ordinance, Cap 336 if he wishes to appeal against the grant of extension of time. 

(c)  In the summons of 29 July 2019, reference was made to Order 3 Rule 5 and Order 59 Rule 2B.  We are unable to see how those provisions can form a valid basis for this Court to entertain the setting aside application in the present circumstances.     

(d)  At the hearing, Ms Yip submitted that this Court can grant leave as this is a rolled-up hearing.  Even assuming that this Court somehow has jurisdiction, as a matter of discretion, we are of the firm view that the application should not be entertained.  Apart from it being a circumvention of the requirement for leave to appeal, such application is by its nature unhelpful satellite litigation adding substantially time and costs to the proceedings.  Leave and extension of time applications are meant to be summary filtering process.  When leave to appeal (including leave involving an extension of time to appeal) has been granted by a judge, this Court will usually refuse to entertain any application to revisit the question of leave.  It would usually be more in line with the underlying objectives in Order 1A Rule 1 to proceed with the substantive appeal at which the merits will be examined once and for all.   

(e)  It should be borne in mind that the Judge’s decision to grant leave was made on an inter partes basis after fair opportunity had been given to H to make representations.  The fact that H’s former solicitors failed to pay proper regard to the automatic direction to lodge written submissions opposing the application cannot be an excuse for revisiting the Judge’s decision.  His redress (apart from any redress he might pursue against his former solicitors) should be confined to the right to contest the appeal on its merit. 

53.Further, even if the Judge had erred in applying a lower test for granting extension of time, and it therefore falls on us to consider the application afresh, we would have granted such extension since we are of the view that Ground 1 has strong merit (and indeed, as discussed below, provides sufficient basis for this Court to set aside the FDR Order).  We are also of the view that despite the delay of W, it was clear to H that she had been taking every possible step to challenge the FDR Order.  On the facts of the present case, despite the pursuit of wrong procedure, we are satisfied on a multi-facet assessment that there is no Henderson v Henderson abuse.  As held in Ko Hon Yue v Chiu Pik Yuk (2012) 15 HKCFAR 72, the essence of that doctrine is abuse.  Ms Yip SC failed to persuade us that to allow W to proceed with the present appeal in the present circumstances is abusive.  Due to the limited effect of the FDR Order as discussed below, the ancillary relief proceedings would have to proceed in any event.  Given our view on the merit, H should not have resisted the challenge to the FDR Order.   

54.For these reasons, H’s Setting Aside Application is dismissed.

W’s appeal based on Ground 1

55.By Ground 1, W argues that (i) as a matter of law, the Court in a FDR hearing cannot make a substantive order unless the order is made by consent and (ii) as a matter of fact, W did not consent to the FDR Order.

56.In Rose v Rose, supra at para 28, Thorpe LJ held that at a FDR, only three categories of order can be made:

(a)  An order adjourning the appointment;

(b)  A consent order disposing of the case; or

(c)  Directions to progress the case to its final hearing.

57.In association with category (a), it could include procedural directions to facilitate the process of the FDR (e.g. that the FDR be held by a judge with the assistance and participation of a mediator). In addition, a judge can make an order for costs in respect of the FDR itself: see LCC v LTLA [2019] HKCA 762.

58.Within category (b), there can be order by consent for partial disposal of the case.

59.Paragraph 8(g) of Practice Direction 15.11 also makes it clear that this is the position in Hong Kong.

60.In AB v MAW [2017] 1 HKLRD 385, the Court of Appeal reiterated that FDR hearing is a without prejudice process, hence the judge presiding over it should not be further involved in processing other contested matters in the same case.  The judgment also highlighted the confidential nature of the process: see [1], [4.5] and [4.10], [5.1] to [5.2].  As explained in that judgment, confidentiality of that process is essential so that parties can express themselves before the FDR judge without fear of their statements in such hearing being subsequently taken into account on a substantive determination of the ancillary relief. 

61.Thus, it goes against the inherent nature of a FDR hearing for a FDR Judge to make an order (other than an order by consent) which may impinge or preempt some issues that may have to be determined by the judge presiding over an ancillary relief trial. 

62.There is no doubt to us that the FDR Order is not an order coming within the scope of Thorpe LJ’s categories (a) and (c).

63.The FDR Order is in fact a very strange order and we are quite certain that it is not the kind of order that a judge can make in a FDR without the consent of all the parties.

64.Whilst there are instances where a judge can direct that an imperfect order announced at a FDR be perfected (as in the case of Rose v Rose), the present case is not such situation.  On 15 March 2017, Judge Bruno Chan did not make any order.  The memorandum was only signed after the hearing.  It is crystal clear from Judge Bruno Chan’s observations at the hearing on 21 June 2017, he did not endorse the memorandum as an order of the court.

65.The memorandum only has the status of an agreement between the parties.  Whilst it is possible for a party to ask the court to approve an agreement and convert the same into a court order, in family proceedings the court is not bound to accept the terms of such agreement as the appropriate ancillary relief.  In cases where there are children involved, the court has to examine if sufficient provision has been made for the children.  Considerations as discussed in Edgar v Edgar [1980] 1 WLR 1410 and Xydhias v Xydhias [1999] 2 All ER 386 will have to be taken into account: see also L v C [2007] 3 HKLRD 819.

66.If a party contested the appropriateness of turning an agreement into a court order, it would not be consensual business.  In other words, despite agreement previously reached, a party can still argue before a family judge that the agreement should not be converted into a court order resolving the ancillary relief. 

67.In the context of FDR, a FDR judge should not make an order based on an agreement without the continual consent of a party.  In Rose v Rose, the FDR took place before Bennett J at a vacation hearing. At the end of the hearing, parties reached agreement and informed the court accordingly.  The judge recorded the agreement and congratulated the parties.  He directed that the formal order be submitted for approval in the next week[21].  Over the week, the husband changed his mind and sought to retract from the agreement. The wife’s lawyers made an application for the husband to show cause why the agreement should not be made an order of the court[22].  That application came before Coleridge J who refused to convert the agreement into a court order.  Thorpe LJ held that Coleridge J was right to do so[23].  Later another application was made on the basis that an imperfect order having been made by Bennett J[24] (and that basis was rejected by Coleridge J but accepted by Thorpe LJ[25]).  It was only in such circumstances that the Court of Appeal reversed Coleridge J’s decision on the second application and held that the order of the court should have been perfected. 

68.The approval by Thorpe LJ to the refusal of the first application by Coleridge J highlighted the point that a contested application for converting an agreement into a court order should not be resolved in a FDR as if the matter is still subject to consent.

69.In the present case, as borne out by the transcript of the 2^nd FDR hearing, the W did not give consent for a court order in respect of the memorandum.  She made it very clear that she resiled from the memorandum.  Thus, the only course that the Judge could take was to invite the parties to conduct further negotiations in the FDR or alternatively give directions for having the case proceeded to trial. 

70.It is not clear to us what the Judge hoped to achieve by making an order in terms of the FDR Order.  At the same time, she directed consent summons to be submitted under para 2 of the order of 15 August 2017 and adjourned the FDR under para 3 of the same order.  It seems to us that the Judge did not intend to convert the terms of the memorandum into an order of the court by the FDR Order.  If so, we are unable to see the purpose and the effect of the FDR Order.   

71.By the time the matter came before the Judge at the 2^nd FDR, whether the memorandum represented the full agreement between the parties to resolve ancillary relief had become contentious: W asserted and continues to assert that insufficient provisions were made for the maintenance of the children.  It is not the business of a FDR judge to determine such issue.  If no consensual position was reached, no consent order could have been made.     

72.The fact that W had, at one point, agreed to the memorandum and signed it on the day of the 1^st FDR hearing cannot not be a valid basis for the Judge to make a consent order at the 2^nd FDR hearing.  Since consent orders are considered to be contractual in nature (which in turn gives rise to a number of practical and procedural implications), no order should be treated as being made “by consent” unless the parties consented to the order at the time the order was made. 

73.In Foskett on Compromise (9^th ed) at para 10-03, it is stated as follows:

“ Before the court will enter a consent order or judgment it must be satisfied that the appropriate consents have been given. Without such consents no order can be made and the court cannot consent on behalf of a party. Where parties are physically before the court, either in person or by representation, it is usual for the court to ask directly for confirmation of the consents. The consent of an unrepresented party is no less real than that of a represented party, but the court may enquire a little further to ensure that such consent is given voluntarily.”

74.Before us, Ms Yip readily accepted on behalf of H that the FDR Order is not within the scope of consent order.  Counsel however submitted that the FDR Order should be regarded as a direction which guide the future course of proceedings in the ancillary relief application.  Thus the memorandum shall be considered by the court as a part-Edgar agreement and its effect shall be assessed by the judge presiding at the trial of the ancillary relief application.  Counsel said the order comes within category (c) of the types of order that could be made on FDR as discussed in Rose v Rose, supra and consent was not a prerequisite. 

75.With respect, we cannot accept these submissions.  Firstly, directions for future conduct should only be given when it is clear to the FDR judge that no consent order would be made in the FDR.  The Judge obviously did not take such a view as she directed for consent summons to be lodged.  She was not giving directions for future conduct of the ancillary relief application.

76.Secondly, the kind of directions for future conduct which a FDR judge can legitimately give should be confined to procedural directions.  It should not encompass a determination of substantive issues.  Otherwise, it would infringe the principle of confidentiality of the FDR process and the FDR judge would trespass onto the process of substantive determination of the dispute.  As explained above, whether the memorandum should be converted into a court order is a substantive issue which the trial judge presiding over the ancillary relief trial will have to grapple with.  It is not for the Judge sitting as the FDR judge to make any order to pre-empt the same.

77.Thirdly, we do not agree with Ms Yip that the FDR Order operated only as if it were a direction for an affidavit to be filed exhibiting the memorandum.  It purports to hold that the memorandum was the agreement between the parties apparently precluding whatever disputes W may wish to raise on the effect of her signature on the document.  The fact that W had agreed before the Judge in the course of the FDR that the memorandum was her agreement is not germane.  The point is that a FDR judge should not make an order which might have an effect on the adjudicative process in the ancillary relief trial.

78.Fourthly, we reject Ms Yip’s submission that since the parties had alluded to the memorandum at contested hearing (including the hearings in June 2017 before Judge Bruno Chan and the April and August 2018 hearings before Judge CK Chan) that no more privilege attached to the FDR hearings.  Notwithstanding the open references to the memorandum, the FDR hearings should remain confidential and whatever said by the parties at those hearings should not be revealed to the judge presiding over subsequent contested ancillary relief hearing.

79.Hence, we do not accept that the FDR Order is an order which a judge could legitimately make at an FDR hearing.  

80.For these reasons, we held that the Judge erred in making an order in terms of the FDR Order.  Accordingly, the appeal should be allowed on Ground 1 and we dismiss the summons of H for setting aside leave.

81.We have heard Ms Wong on the W’s Leave to Appeal Application and W’s New Evidence Application and considered parties’ skeleton submissions on the same.  We are of the view that these applications are neither necessary nor arguable.  If W succeeds on Ground 1 (as she did), it provides sufficient ground for setting aside the FDR Order.  Further, if she fails on Ground 1, we are of the view that she would not be able to succeed in having the FDR Order set aside on Ground 2 and 3 as the Judge would be held to be correct in holding that she could still challenge the memorandum subsequently with legal representation and raise grounds of fraud and material non-disclosure.

82.We therefore dismiss W’s summons for these applications.

83.We have heard counsel on costs.  Ms Wong had not been able to refute Ms Yip’s submission that all along H’s position was that the FDR Order did not prevent W from challenging the weight to be attached to the memorandum in the contested ancillary relief application.  Notwithstanding so, H had been resisting the appeal and Ms Yip had made full efforts in seeking to uphold the FDR Order.  At the same time, we do not agree with Ms Wong that we should absolve W from the consequences of her unsuccessful summons because of the outcome under Ground 1.  We have actually dismissed W’s summons.  Having considered the respective merits of the parties’ position in the appeal and the various summonses, we think a fair way to deal with costs is to order H to pay half of the costs of W in the appeal (including the costs of H’s summons but excluding the costs of W’s summons) and the leave application below.  Such costs are to be taxed if not agreed.

Ms Athena Wong and Mr Emmanuel Benami, instructed by T K Tsui & Co, for the petitioner

Ms Anita Yip SC and Mr Ken S H Chan, instructed by Ng & Co, for the respondent