Npyj v. Smrc

FCMC 9098/2018

[2021] HKFC 81

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 9098 OF 2018

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Coram:  District Judge A. Tse in Chambers (Not Open to Public)

Date of Judgment: 13 May 2021

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J U D G M E N T

( Leave to Appeal against the order

for Interim maintenance and costs )

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1.This is an application by the Respondent (Husband) for leave to appeal against the order for Interim maintenance and costs dated 25 June 2019, which provided as follows:

(1)  The Respondent’s application dated 26 February 2018 be dismissed;

(2)  The costs of and incidental to the respondent’s application dated 26 February 2018 including all costs reserved shall be paid by the Respondent, to be taxed if not agreed;

(3)  The Respondent shall pay a sum of HK$64,000 per month to the Petitioner (Wife) as interim maintenance for the two Children of the family until further order of the Court, to be backdated to 13 April 2018, the date of the petitioner’s application;

(4)  The costs of and incidental to the Petitioner’s applications dated 13 April 2018 and 17 August including all costs reserved shall be paid by the Respondent, to be taxed if not agreed.

(5)  There shall be certificate for counsel for the petitioner for both applications;

(6)  There shall be an immediate taxation.

Applicable Legal Principles

2.The Respondent submitted that:

“3. It is anticipated there will be no dispute as to the relevant principles.

4. Smith v Cosworth test has survived the CJR and has been summarized as being that leave should be granted unless it is shown that he has no arguable case. The Practice Note where Lord Woolf MR laid down the guidelines is to the effect that:

(a) The court will only refuse leave if satisfied that the applicant has “no realistic prospect of succeeding on the appeal”. This test is not to be treated differently from “no arguable case”.

(b)   However, the court can grant leave even if the court is not satisfied that the appeal has any prospect of success, e.g., the issue may be one which the court considers should, in the public interest, be examined, or, more specifically, the court takes the view that the case raises an issue where the law requires clarification.”

5.  The current White Book confirms this approach:

For leave to appeal in cases, where the threshold test is not provided in the relevant statute, the general test which the court applies in deciding whether or not to grant leave to appeal is this: leave will normally be granted unless the grounds of appeal have no realistic prospects of success (Smith v Cosworth casting processes Ltd (Practice Note) [1997] 1 W.L.R. 1538; [1997] 4 All E.R. 840, CA)

(See Hong Kong Civil Procedure 2019 O.59, e.2A [59/2A/4] 1176)

6.  A reasonable prospect of success, therefore, means an appeal with prospects that are more than ‘fanciful” but which do not need to be shown to be “probable”; see, for example, the Court of Appeal’s decision in KNM v HTF, unreported, HCMP 288/2011 at §7, SMSE v KL [2009] 4 HKLRD 125 (CA) and CMW v MTY [2016].”

3.The submissions from the Respondent and his legal representatives are not only wrong but was dishonest and designed to mislead the Court. They referred the Court to RHC Order 59. They must therefore be aware of the provisions in that Order.

4.RHC Order 59 [59/0/4] provides as follows:-

“Court and Tribunals from which appeal lies to the Court of Appeal –

“3. District Court – Appeal lies to the Court of Appeal against every judgment, order or decision of a district judge in any civil cause or matter, subject to leave being obtained (s.63(1), District Court Ordinance (Cap.336)…"

5.Order 59, r.2A referred to by the Respondent provides as follows:-

“It has to be noted that the CJR only introduced new leave condition to appeals against interlocutory judgment or order, and District Court and Lands tribunal appeals. For leave to appeal the conditions of which are set out by the CJR, the “reasonable prospect of success” test or “the interest of justice” test set the threshold for granting of leave to appeal (see High Court Ordinance s.14AA(4)(a); District Court Ordinance s.63A(2)…). Section 14AA(4)(a) of the High Court Ordinance is identical to 63A(2) of the District Court Ordinance.

6.Under section 63A(2) of the District Court Ordinance (Cap.336), no leave to appeal shall be granted unless the Court is satisfied that the intended appeal has reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard.

7.Reasonable prospect involves the notion that the prospect must be more than fanciful without having to be probable: see SMSE v KL [2009] 4 HKLRD 125 at § 17 (which is one of the cases cited by the Respondent).

8.In SMSE (supra), Le Pichon JA observed:

“Leave to appeal under Order 59, rule 2B is not lightly granted. The relevant test appears in section 14AA(4) of the High Court Ordinance. In granting leave, the judge must have considered that the test set out in section 14AA(4) had been met. The section requires that the court be satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard before granting leave. Reasonable prospects pf success involves the notion that the prospects of succeeding must be “reasonable”, and therefore more than “fanciful”, without having to be “probable”

9.Paragraph 59/2A/4 of the White Book further provided:

“To meet the “reasonable prospect of success” test, an applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed.”

10.In KNM v HTF (unrep, HCMP 288/2011, [2011] HKEC 1210)also a case cited by the Respondent), the Court of Appeal (at §9) confirmed that “the relevant test of whether an appeal has a reasonable prospect of success under section 63A [District Court Ordinance], is whether the applicant for leave can show that he has an arguable case with chances of success on appeal. A reasonable prospect therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”. It was insufficient to show that the appeal was “merely arguable” and “not fanciful for the court to be satisfied that it had a reasonable prospect of success” [See RHC 59/2A/4]/.

11.RHC 59/2A/4 further provided:

“Where the intended appeal is an appeal against the exercise of discretion of the judge below, the applicant would have to show that he has an arguable case with reasonable chances of success that the relevant decision exceeds the generous ambit within which reasonable disagreement is possible, and is in fact plainly wrong, and not merely the appellate court would prefer a solution which the judge had not chosen (RK v YS, HCMP 1969/2012, 1 November 2012, CA).

It has to be noted that whilst the Court would not grant any leave to appeal without a reasonable prospect of success being demonstrated, the converse of not true. Even if the Court takes the view that there is a reasonable prospect of success, it still retains a discretion as to whether to grant leave, although the fact that there is, ex hypothesi, a reasonable prospect of success would heavily influence the Court’s exercise of discretion: per Cheung J, (as he then was) in Ho Yuen Ki Winnie & Other v Ho Hung Sun Stanley Sociedade De Turismomn & Other (unrep. HCA 391/2006, 25 May 2009)…”

12.The granting of maintenance pending suit is a discretionary remedy. On appeal, the Court of Appeal will not exercise the discretion afresh. Instead, it will only interfere with the decision when the discretion was wrongly exercised, such as being contrary to the principle or the primary judge had wrongly taken into account irrelevant matters or ignored relevant matters [ see MWY v HWM HCMP 120/2017, 16 May 2017; WW v LLN [2019] HKCA 1278 at §§ 15-17.

13. In CHWA v LNLAI [2019] HKCA 1017 at § 3.1, the Court of Appeal, in refusing leave to appeal, stressed “the interim nature of [maintenance pending suit] which generally requires the Court to adopt a broad brush approach in deciding the amount to be awarded. It is also for a limited duration until the final resolution of the issue of financial relief of the parties. Inevitably there will be adjustment to the final order to be made in the event of overpayment or underpayment of [maintenance pending suit].”

14.The threshold for appealing against an order for maintenance pending suit is a high one. The court is inclined to leave factual questions of expenses and income for determination at the ancillary relief hearing. The Court of appeal also stated that appeals against maintenance pending suit orders are “rare” and the “powers of interference [of an appeal court] are strictly limited”: K v K [2011] 1 HKC 66 at §§1, 3; Hewitt, Family Law and Practice in Hong Kong (3^rd ed. 2018), § 6.07

The Proposed Grounds of Appeal

15.According to the draft Notice Of Appeal, the proposed grounds are as follows:-

“(1) The learned Judge erred in finding, whether implicitly or at all, that the respondent had sufficient income from earnings to pay the sum of HK$64,000 per month to the petitioner as interim maintenance for the children. Further, the learned judge erred in failing to take account of the fact that whilst accepting that the petitioner has substantial earning capacity failed to take any or any sufficient account of the fact that the respondent’s net earnings had decreased. Further, the Respondent will seek lave to adduce additional evidence that was not available at the hearing pursuant to Ladd v Marshall principles. This is to the effect that consider that on 19 July 2019 the Respondent was told that on 19 July 2019, the Hong Kong Bar Disciplinary Committee had handed down a decision to suspend the Respondent from practice for a period of 3 years (the HKBDC decision”). Subject to any interim stay and or stay pending appeal and the eventuality of a successful appeal, the respondent is unable to earn any income as a barrister.

(2) The learned Judge erred by making an order that required utilization of capital assets with increasing rental income by either sale the said capital assets. The learned Judge referred to leasing out the former Matrimonial Home referencing income of HK$90,000 as a source of income (see paragraph 49 of the Judgment) when that property is where the Respondent still resides. The learned judge erred in making an order that required utilization of capital assets and erred as aforesaid in the premises that the same necessitated the co-operation of the Petitioner but the learned Judge failed to seek undertakings from the Petitioner and make orders that would facilitate the required utilization of capital assets including the withdrawal of the Form 25 filed by the Petitioner at the Land Registry against the properties.

(3) Without making an order interms of paragraph 3 of the Order sought by the Respondent the learned judge ered in backdating the interim order to the date of the petitioner’s application in April 2018. Further, the learned judge erred as aforesaid in the premises that the said order as an interim order and backdating for a period pf n15 months was the equivalent of a payment from capital of HK$960,000 when the learned Judge had correctly found that the petitioner had assets of HK$26.46 million in her control and a substantial earning capacity. The question of backdating should have been adjourned to be dealt with as part of the final ancillary relief at the FDR or at the final ancillary relief hearing”.

Analysis

16.I shall deal with each of the grounds of appeal in turn.

Grounds 1 and 3

17.It is trite law that the only test in an application for maintenance pending suit is “reasonable needs” and the party’s ability to pay. This includes income, earning capacity, assets and resources.

18.The Court never found (whether implicitly or otherwise) that the Respondent had sufficient income from earnings to pay HK$64,000 as maintenance pending suit. There was no dispute that the family assets amount to over HK$100 million and that the bulk of those assets are under the name of the Respondent. The Court found that the Respondent had the ability to pay the maintenance pending suit. 

19.As was pointed out in the Court’s Judgment, although she has a high earning capacity, there was no dispute that the Wife was unemployed for over a year prior to the hearing. She had no income and it was unknown when she would find employment. The assets under her name was also capital, out of which she had to maintain herself, at least one of the children and pay for her own legal expenses (which were extremely high as a result of the respondent’s behavior set out below).

20.On the other hand, up until 19 July 2019, the Respondent was practicing as a barrister-at-law. He asserted that his income had decreased because he had to deal with these proceedings. Despite that, he had an average monthly income of HK$200,000. Since the commencement of these proceedings, the Respondent has been obsessed with taking out repetitive and unmeritorious applications, filing voluminous Affirmations, obtaining all transcripts, appealing against almost every ruling, bombarding the Petitioner and her former solicitor with hundreds of emails and demanding an immediate answer, consenting to orders only to change his mind at the last minute which necessitated a hearing. At the time of the hearing, the Respondent’s income would not be affected had he desisted from such behavior. As was explained in the Judgment, the Respondent’s alleged reduction of income was considered. The Court found that he was the author of his own wrong.

21.Apart from his practice, the Respondent was also receiving rental from two valuable properties in the UK, the 2 carparks and 11 motorcycle carparks at the Former Matrimonial Home. In addition, the Respondent sold the debenture for the children’s school and received HK$2 million in August 2018.

22.The Petitioner was not asking for maintenance pending suit for herself. Her application was for maintenance pending suit for the two children of the family. She was only asking the Respondent to contribute towards half of the children’s expenses.

23.Section 5 of the Matrimonial Proceedings and Property Ordinance (MPPO) provides as follows:-

“5. Financial provision for child of the family in cases of divorce, etc

(1) Subject to the provisions of section 10, in proceedings for divorce, nullity of marriage or judicial separation, the court may make any one or more of the orders mentioned in subsection (2) –

(a) before or on granting the decree of divorce, of nullity of marriage or of judicial separation, as the case may be, or at any time thereafter;…

(2) The orders referred to in subsection (1) are –

(a) an order that a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments and for such term as may be so specified;…

(b) …

(c) An order that a party to the marriage shall pay to such person as may be so specified for the benefit of such a child, or to such a child, such lump sum as may be so specified.

(3)   Without prejudice to the generality of subsection (2)(c), an order under this section for the payment of a lump sum to any person for the benefit of a child of the family, or to such a child, may be made for the purpose of enabling any liabilities or expenses reasonably incurred by or for the benefit of that child before the making of an application for an order under this section to be met…”

24.The Court is clearly entitled to backdate the order to the date of the Petitioner’s application under section 5(2)(a) above.

25.The Respondent’s Counsel argued in his submission that the Respondent can only satisfy the orders by selling one of his assets. The manner in which the Respondent wishes to comply with the order is a matter for him. The Court did not make any order for the sale of properties. The Petitioner’s willingness to sell the properties was only made in the context of the Respondent’s application for maintenance pending suit for himself.  The Respondent and his legal representatives are deliberately misreading the Court’s Judgment.

26.In his draft Notice of Appeal, the Respondent stated that he would seek leave to adduce additional evidence under Ladd v Marshall [1954] 3 All ER 745 that he was suspended from practice by the Hong Kong Bar Association on 19 July 2019. The principles of that case only applies to evidence that was already in existence at the time of the hearing but could not be obtained with reasonable diligence.

27.The Respondent’s practice was only suspended after the conclusion of the hearing. Whilst it may be ground for an application for variation, this is not a ground of appeal.

Ground No.2

28.The Petitioner was unemployed and has been unemployed for over a year prior to the hearing. She was required to use capital. At the time of the hearing, the Respondent was still practicing as a barrister-at-law. If he did not waste time in bringing repetitive and unmeritorious applications, he would be earning at least HK$200,000 per month. He could also make an application to pay the backdated interim maintenance by instalments under s.5(4) of the MPPO. There was no need for him to resort to using capital.

29.The Respondent was living alone. former matrimonial home was well in excess of his reasonable needs. He could move to smaller premises and lease out the former matrimonial home to increase his income.

30.The Respondent argued that the Court had failed to seek undertakings from the petitioner for the sale of the matrimonial properties. The sale of the matrimonial properties was suggested by the Petitioner and her consent to such sale was recorded in correspondence from her former legal representatives.

31.The Respondent submitted that the Court should have made orders to facilitate the utilization of assets. The Court has no jurisdiction to make an order for sale at the interim maintenance stage. The Court also had no power to order the Petitioner to withdraw her Form 25 at the Land Registry.

Conclusion

32.By reason of the above mentioned matters, the Respondent’s proposed appeal has no reasonable prospect of success and there are no other reasons in the interests of justice for the appeal to be heard. His application for leave to appeal is dismissed with costs to the Petitioner, to be taxed if not agreed.

Both the Petitioner and the Respondent acting in person