Gm-sa Aka Dg, M-s v. Ddpj

CACV 200/2022

[2022] HKCA 870

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 200 OF 2022

(ON APPEAL FROM FCMC NO. 9657 OF 2016)

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BETWEEN

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Before:   Hon G Lam and Chow JJA in Court

Date of Hearing:  7 June 2022

Date of Reasons for Judgment and Decision on Costs:  20 July 2022

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REASONS FOR JUDGMENT AND DECISION ON COSTS

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Hon Chow JA (giving the Reasons for Judgment and Decision on Costs of the Court):

INTRODUCTION

1.At the conclusion of the Respondent/Plaintiff (“H”)’s appeal against the order (“the Order”) of His Honour Judge G Own (“the Judge”) dated 30 November 2021 dismissing his application for leave to adduce expert evidence on French law in respect of a Pre-Nuptial Agreement dated 27 August 1999 (“the PNA”), we allowed the appeal with reasons to be given later, and reserved our decision on the issue of costs.  These are our reasons for allowing H’s appeal and our decision on costs.

BASIC FACTS

2.The Petitioner/Defendant (“W”) and H, both French nationals, were long term residents in Hong Kong.  They were married in France on 3 September 1999, and have 2 children, born in 2005 and 2008 respectively.

3.Shortly before their marriage, they entered into the PNA in Roubaix, France.  According to H, the PNA:

(1)  was at all material times valid and enforceable from a formal and substantive point of view;

(2)  was made under the matrimonial regime of “participation in acquisitions” (participation aux acquits) as provided by the French Civil Code;

(3)  contained an article, namely, Article 6, by which the professional assets of both parties were to be excluded from the division of assets in the event of a divorce;

(4)  had the effect of maintaining under H’s separate ownership his interest in, and later proceeds of sale of, a business (“the JH Business”); and

(5)  further had the effect of excluding H’s interest in, and later proceeds of sale of, the JH Business from any sharing or equalization upon a divorce.

4.According to W, by around 2011, the marriage with H was in serious difficulties.  The possibility of divorce was raised in early 2016.  

5.Between April and 21 July 2016, the parties entered into negotiations for divorce, during which time (according to H) W repeatedly denied that she had formed any romantic or adulterous relationship with any third party.  On 1 August 2016, W filed a petition for divorce against H in FCMC 9657/2016.  Prior to the filing of the divorce petition, the parties had reached agreement over arrangements regarding their children and financial matters, and two consent summonses reflecting the agreed arrangements were filed at the same time as the divorce petition.

6.On 20 September 2016, Her Honour Judge Melloy granted a decree nisi (“the Decree Nisi”)[1] in respect of the divorce, and made 2 consent orders (“the Children’s Consent Order” and “the Ancillary Relief Consent Order” respectively, and “the Consent Orders” collectively).

(1)  Under the Children’s Consent Order, both H and W have joint custody of the children, with care and control to W and reasonable access to H including staying access on two out of every three weekends.

(2)  Under the Ancillary Relief Consent Order, the joint assets of the family are divided roughly on a 50-50 basis with a slight tilt in favour of H.

7.H alleges that, on 25 September 2016, 5 days after the Consent Orders were made, he was informed by W of her plans to relocate to Europe with the Children (this allegation is disputed by W).  H’s solicitors proposed an amendment to the Children’s Consent Order to state that neither party had any intention to leave Hong Kong at that time or in the reasonably foreseeable future.  W refused to amend the Children’s Consent Order as proposed.

8.According to H, on 30 September 2016, he received information and confirmation from W’s brother-in-law that W had been having an adulterous affair with a third party (“T”) for a considerable period of time.  When confronted with this allegation, W (through her solicitors’ letter dated 5 October 2016) denied that she had any ongoing relationship with anyone.

9.On 14 October 2016, H made an application for leave to appeal the Decree Nisi and the two Consent Orders.  H said that he had found out that W had formed a relationship with T and intended to relocate to Switzerland with the children, and contended that if he had known about those matters, he would not have agreed to the Consent Orders or the divorce.  H’s application for leave to appeal was rejected by Her Honour Judge Melloy on 24 April 2017, and his renewed application for leave to appeal was rejected by the Court of Appeal on 18 August 2017.  In the Reasons for Decision in HCMP 1052/2017, the Court of Appeal expressed the view that:

(1)  assuming that there was a requirement for W to make disclosure and failure to do so would entitle H to set aside the Consent Orders and Decree Nisi, in the context of the present case, the proper procedure would be for H to bring a fresh action to set them aside; and

(2)  in respect of the Decree Nisi, there was no reasonable prospect of success on appeal in view of H’s indication that he intended, after rescission of the Decree Nisi, to file an answer to W’s petition and present a cross-petition himself.  The Court of Appeal considered that the marriage of H and W had plainly come to an end, and to allow the Decree Nisi to be set aside would only serve to delay the inevitable.

10.On 20 October 2017, H commenced a fresh action in the High Court (HCA 2431/2017, “the Action”) to set aside the Ancillary Relief Consent Order.  In the Statement of Claim, H alleges, inter alia, that:

(1)  W was under a continuing duty of full and frank disclosure of matters material to the negotiation between the parties in respect of their proposed divorce and the arrangements regarding their children and financial matters, such duty being owed to both H and the Court;

(2)  W falsely misrepresented and/or failed to make full and frank disclosure in respect of her alleged relationship with T and her intention to relocate from Hong Kong in the foreseeable future (“the 2 Matters”);

(3)  But for such misrepresentations and/or material non-disclosure, H would not have agreed to the divorce or the Consent Orders;

(4)  Instead, H would have filed for divorce proceedings against W in France in April 2016, and would have relied upon the PNA (whether in proceedings in France or in Hong Kong); and

(5)  His agreement in respect of the Ancillary Relief Consent Order was vitiated by W’s misrepresentations and/or material non-disclosure, and the same should be set aside.

H also expressly confirms that he does not seek to set aside the Children’s Consent Order or the Decree Nisi.

11.At §70 of the Statement of Claim, H pleads that:

“Based upon the entitlement of the parties under the Ancillary Relief Consent Order as against the entitlement of the parties under the provisions of the Pre-Nuptial Agreement, [W] has received under the Ancillary Consent Order assets to a current value of approximately US$12 million to which she was not and is not entitled.”

12.W denies H’s claim.  In her Defence and Counterclaim dated 19 January 2018, she says that even on 5 October 2016, she was not in a relationship with T in which she contemplated cohabitation or re-marriage or relocation of the children from Hong Kong (§41).  The intention to relocate came about as a result of a promotion offered by her employer to work in Europe in January 2017 (§§26-27).  In relation to the PNA, W’s position is that -

“… the applicable and proper law is Hong Kong law and that in any event, the Pre-Nuptial Agreement does not have the effect described by the Plaintiff in paragraph 6(4) and (5) of the Statement of Claim as in both France and Hong Kong, the cash received from the sale of the [JH] shares in 2014 (two years prior to the divorce proceedings [commenced] in Hong Kong) and the [JH] shares retained by the Plaintiff would be included and not excluded from the calculation of matrimonial assets available to the parties at the time of the divorce. The Defendant produced French expert evidence to this effect to the Court and to the Plaintiff in the Family Court Divorce proceedings. The Plaintiff at no time produced French expert evidence to corroborate the assertions made by him” (§8).

13.W further pleads, at §51 of the Defence and Counterclaim, that:

“(c) Further, the Shares of and in [JH] (and their proceeds of sale) were matrimonial assets, and the Defendant had also substantially and materially contributed towards the same and was entitled to share in the same; or at least the Defendant was entitled to so argue and the Plaintiff did not seek to contest against the same in the Family Court;

(d) It is averred that the Shares of and in [JH] and their proceeds of sale were not excluded whether by reason of being ‘work related’ or otherwise;

(e) In particular, after selling most of the Shares of and in [JH] and/or after being evicted from executive management and control, the Plaintiff was a mere investor and minority passive shareholder. Although he was a non-executive Chairman of the company for a few months after the sale, the new shareholders informed him of his demotion to non-executive board member by official letter just a few months after the divestment was completed. The remaining Shares were kept and held as mere investments, at the Plaintiff[’s] sole choice, and not for any professional or work-related reason;

(f) By the time the Ancillary Relief Consent Summons was being negotiated, the Plaintiff’s main business activity was not [JH], and he had no executive management and control, with the remaining Shares being kept and held as personal investments;

(g)  Even if, which is denied, the Pre-Nuptial Agreement were relevant and/or applicable (which is not admitted), it would have made no difference to the financial settlement.  Moreover the Plaintiff was at all material times aware of his Pre-Nuptial agreement, referred to it during the divorce discussions, and chose not to rely on it.”

14.In relation to the relevance of French law, W contends, at §52 of the Defence and Counterclaim, that:

“If and insofar as may be necessary, the effect (if any, which is not admitted), meaning, construction and/or interpretation of the Pre-Nuptial Agreement will be the subject-matter of expert evidence on foreign law and/or submissions as to Hong Kong law…”

15.W further claims in her Defence and Counterclaim that whilst she has performed her part of the Ancillary Relief Consent Order, H has not.  She has had difficulties leasing out the former matrimonial home due to H’s failure to transfer it to her in accordance with the Ancillary Relief Consent Order.  W counterclaims for damages for loss of profit, loss of opportunities and emotional distress.

16.In H’s Timetabling Questionnaire filed on 30 May 2018, he stated that he intended to apply, on or before 3 October 2018, for leave to adduce expert evidence in respect of the jurisdiction of the French Courts over divorce proceedings involving French citizens who were married in France and the validity and enforceability of the PNA between the parties under French law.

17.In W’s Timetabling Questionnaire filed on 17 December 2018, she stated that she did not consider expert evidence on French law to be necessary.  However, if H called a French law expert to give evidence, she would call one in reply.

18.On 18 February 2019, W made an application to transfer the Action from the High Court to the Family Court.  That application was acceded to by Au-Yeung J on 8 January 2021.

19.On 28 May 2021, Her Honour Judge Melloy made a consent order (“the Consent Order for Directions”) which contained a number of agreed directions for the purpose of the trial of the Action, including: (i) the Action be set down for trial with 5 days reserved, and (ii) there be a pre-trial review 60 days before the commencement of the trial.

THE DECISION

20.Notwithstanding the indication in H’s Timetabling Questionnaire, he did not apply for leave to adduce expert evidence on French law on or before 3 October 2018, or sought such leave in the consent summons leading to the Consent Order for Directions.  It was not until 2 July 2021 that he applied, by a summon dated 16 June 2021, for leave to adduce expert evidence on French law (“the Summons”).

21.H’s application for leave to adduce expert evidence was dealt with on paper by the Judge, who gave his decision (“the Decision”) on the application on 30 November 2021, by which time the pre-trial review had been scheduled for 14 December 2021 and the 5-day trial of the Action had been scheduled to take place in April 2022.

22.In approaching H’s application for admission of expert evidence, the Judge considered 4 questions:

(1)  Question (a): “From reading H’s case as pleaded in the [Action], what are the issues before this Court that need to be resolved at the substantive trial in April 2022, where H is now seeking leave to adduce expert evidence?”  The Judge answered as follows -

“[42] On question (a), the issue to be resolved is just that whether W had misrepresented and/or failed in her disclosure of the 2 facts that H is now complaining about. Clearly, this is a question of fact which could only be decided by the Court after trial when parties’ evidence and credentials have been fully tested. The Court requires no expert evidence or opinion in the fact-finding exercise. I decided that expert evidence on French Law is not required for determining the issue of the alleged misrepresentation and/or failure in full and frank disclosure pleaded by H in the [Action] to be tried in April 2022.

[43]  Putting H’s case to the highest, it is only when H had successfully set aside the [Ancillary Relief] Consent Order and then French Law may probably be needed. Even in such a case, the expert evidence will only be needed insofar as the French PNA is concerned, for assisting the court in determining ancillary relief; that is to say, whether the parties would be bound by the French PNA or otherwise.”

(2)  Question (b): “Whether the 2 facts which H is now complaining W had misrepresented him and/or failed to fully and frankly disclose to him during the course of negotiation passes the ‘materiality’ test?”  The Judge answered as follows -

“[44] On question (b), this calls for objective consideration…

[45] In my decision, whether W had or would have developed a relationship with T at the time of the 2 Consent Summonses, objectively considered (emphasis added), does not pass the ‘materiality’ test … That said, W could not be criticized for not disclosing her relationship or ‘would-be’ relationship with T even if that relationship did exist at the time.

[46] As to the fact of relocation complained by H, this relates to the Children’s Consent Order which falls outside the ambit of H’s setting aside application as per his pleaded case in the Statement of Claim under the [Action]. Having said, the disclosure or non-disclosure of the 2 facts by W which H is now complaining is neither here nor there as to whether expert evidence directions should be given.

[47]  It is my decision that H had failed the ‘materiality’ test on the alleged non-disclosure of W’s relationship with T and W’s planned relocation with the 2 children.”

(3)  Question (c): “Whether this Court could form a clear and definitive view as to the relevance of the expert evidence which H is now seeking to adduce to the issues that need to be resolved and that such expert evidence was reasonably required of and would be helpful to the Court in arriving at its decision on those issues?”  The Judge answered as follows -

“[50] On question (c), it is this Court’s clear and definitive view that the expert evidence on French Law was not required or helpful to the Court in determining the issue of alleged misrepresentation and/or non-disclosure of material facts in the [Action]. Since there is no dispute that the expert evidence on French Law presently sought by H’s Summons came from a relevant discipline, this Court would only confine its decision on the relevance of such expert evidence to the issue that needed to be resolved by this Court.”

(4)  Question (d): “Whether there are any other relevant circumstances, such as prejudice or delay, which may undermine the objective aimed by the spirit of the CJR if the court is to grant leave for adducing the expert evidence when a prima facie case for admission was made out.”  The Judge answered as follows -

“[56] Whilst delay of these proceedings could now possibly be avoided with this Decision being handed down today, other equally important factors such as prejudice (if any) that might have caused to W (who has the benefit of the [Ancillary Relief] Consent Order for more than 5 years by now but not receiving her share thereunder); the need for procedural economy and proportionality; the need for expediency to deal with parties’ finances; especially in the matrimonial context, all built in which require careful consideration by the Court.

[57] Given full and careful consideration to all the circumstances, I decided that granting expert evidence directions to H at this stage would be against the objectives of reasonable proportionality and procedural economy under the CJR.

[58] I noted that it is H’s case that the difference in monetary sum under the [Ancillary Relief] Consent Order compared with the monetary sum under the PNA is in the region of around US$12 million which, allegedly, W should not be entitled and that this is a substantial sum of money. However, I am not convinced that difference in monetary sum should take precedence over the objectives under the CJR when considering [whether] or not to grant expert evidence directions.

[59]  Broadly speaking, which should not be taken as any indication of this Court, difference in monetary sum has no place to fit in even at the substantive trial of a setting aside application, let alone that the present application is just an application for expert directions.  For otherwise, litigants who have settled their claims even with the benefit of full legal advice but somehow, with hindsight or second thought, considered the settlement was a ‘bad bargain’ would find it too easy to overturn or set aside the settlement by claiming that there would be a big difference in monetary sum had the matter not been settled.”

23.The Judge also considered that H’s application for expert evidence directions was inexcusably late taking into account the background of the case that such application should have been made on or before 3 October 2018 as stated in H’s Timetabling Questionnaire.  For all of the above reasons, the Judge rejected H’s application for leave to adduce expert evidence on French law.

24.On 22 March 2022, the Judge refused H’s application for leave to appeal against the Order.

THE PRESENT APPEAL

25.By a summons (“the Summons”) dated 6 April 2022, H renewed his application for leave to appeal to the Court of Appeal.  Attached to the Summons is a draft Notice of Appeal containing 11 grounds of intended appeal.  The first 10 intended grounds of appeal are materially the same as those put before the Judge for his consideration of the application for leave to appeal, while the last ground is new.

26.On 10 May 2022, this Court granted H leave to appeal.

DISCUSSION

27.The principal point raised by Mr John Scott, SC (together with him, Ms Madeleine Booth) on behalf of H in support of the present appeal concerns the Judge’s conclusion on the “materiality” of the 2 Matters which H contends W had misrepresented and/or failed to fully and frankly disclose.  Mr Scott submits that:

(1)  A proper analysis as to whether a consent order should be set aside cannot be conducted without (i) a fact-finding exercise in respect of the question of non-disclosure, misrepresentation or fraud (as the case may be), whether intentional or otherwise; and (ii) consideration of the materiality of such non-disclosure and whether in the circumstances, on the balance of probabilities, a different ancillary relief order would have been made.

(2)  The Judge applied incorrect legal principles, and erred in law, when he concluded that the expert evidence and the PNA had no material bearing on the issues to be litigated at trial.  The Judge failed to consider that the effect of the PNA (which requires expert evidence on French law to prove) is relevant to the question of whether a different ancillary order would have been made.

(3)  The Judge confused the question of the materiality of the expert evidence on French law and the PNA with the very different question of the materiality of W’s non-disclosure.

(4)  The Judge further erred by proceeding to pre-emptively determine the “materiality” of W’s non-disclosure prior to trial on an interlocutory basis.  He was wrong to categorise H’s application to set aside the Ancillary Relief Consent Order as one premised on attempting to resile from a “bad bargain” in “hindsight” and “settled with the benefit of full legal advice”.  H’s consent to the Ancillary Relief Consent Order was undermined by W’s non-disclosure.

28.The relevant principles for setting aside a consent order on the ground that it was induced by misrepresentation or material non-disclosure can conveniently be found in the judgment of the English Court of Appeal in Roocroft v Ball [2017] 1 WLR 1137.  In that case, King LJ (with whom Elias LJ and Kitchin LJ agreed) distilled from the judgments of the UK Supreme Court in Gohil v Gohil (No 2) [2016] AC 849 and Sharland v Sharland [2016] AC 871 the following principles:

(1)  The court will only set aside a consent order following either a finding or admission of material non-disclosure (§49).

(2)  It is a well-known rule of public policy that a financial agreement reached between the parties following separation cannot oust the jurisdiction of the court to make orders about their financial arrangements.  Whilst the court will inevitably be heavily influenced by what the parties have agreed, nevertheless the court conducts an independent assessment to enable it to discharge its statutory function under the Matrimonial Causes Act, 1973 (§51).

(3)  The principle that each party owes a continuing duty to the other party and to the court to make full and frank disclosure applies just as much to exchanges leading to a consent order as to contested hearings.  Without such full and frank disclosure, the court cannot discharge its duty under section 25(2) of the Matrimonial Causes Act, 1973 when approving a proposed consent order (§52).

(4)  Before a case for setting aside an order can be made good, the court must be satisfied that there was misrepresentation or non-disclosure and that the misrepresentation or non-disclosure was material to the decision made at the time, resulting in the making of an order which was substantially different from the order it would have made if disclosure had taken place (§54).

(5)  The non-disclosure must of course be material, but the burden of establishing the necessary materiality shifts depending upon the court’s finding as to the nature of the disclosure.  Where a party’s non-disclosure was inadvertent, there is no presumption that it was material and the onus is on the other party to show that proper disclosure would, on the balance of probabilities, have led to a different order; whereas where a party’s non-disclosure was intentional, it is deemed to be material, so that it is presumed that proper disclosure would have led to a different order, unless the party can show, on the balance of probabilities, that it would not have done so (§59).

(6)  The task facing the judge at the trial is therefore to:

(a)  Decide if there had been non-disclosure on the part of the deceased and if so whether it was deliberate on the one hand or innocent/inadvertent on the other.  Such a finding would ordinarily be reached by the judge having heard oral evidence as well as considering the documents although in certain circumstances the court may use its case management powers to conduct some form of abbreviated hearing.

(b)  If the non-disclosure was found to be deliberate, then it is presumed to be “material” and the original consent order would be set aside unless the party who has failed to disclose can prove, on the balance of probabilities, that the order would have been substantially the same even had full disclosure been made.

(c)  If on the other hand the non-disclosure is found to have been inadvertent or innocent, the burden is on the party seeking to set aside the order to prove that the non-disclosure was “material”, that is to say that had proper disclosure been made the court would have made a substantially different order justifying the setting aside of the consent order (§60).

29.Three points arising out of the above principles should be noted.  First, it would appear from §§54, 59 and 60 of the judgment of King LJ in Roocroft v Ball that the issue of “materiality” is to be approached by asking whether the misrepresentation or non-disclosure has resulted in the making of an order which was substantially different from the order that would have been made had there been no misrepresentation or disclosure.  At §§29-31 of her decision dated 8 January 2021 ([2021] HKCFI 77) ordering a transfer of the Action from the High Court to the Family Court, Au-Yeung J stated as follows:

(1)  There is no dispute that the duty of full and frank disclosure exists.  It applies not only to contested proceedings but also to exchanges of information between the parties and their solicitors leading to orders by consent without further inquiry by the court.  The disclosure must also be correct and up to date, to enable the court to properly exercise its discretion: Jenkins v Livesey [1985] AC 424, at 437H and 438B.

(2)  Even innocent misrepresentation as to a material fact is a vitiating factor and courts will set aside orders because the undisclosed fact undermined the whole basis on which the order was made: Sharland v Sharland [2015] 3 WLR 1070, at §30.

(3)  Where a party’s non-disclosure was inadvertent, there is no presumption that it was material and the onus is on the other party to show that proper disclosure would, on the balance of probabilities, have led to a different order.  But where a party’s non-disclosure was intentional, it is deemed to be material, so that it is presumed that proper disclosure would have led to a different order, unless that party can show on the balance of probabilities that it would not have done so: see Gohil v. Gohil (No. 2) [2015] 3 WLR 1085, at §44.

30.Second, the burden of proof of materiality in this sense depends on whether the misrepresentation or non-disclosure was intentional/deliberate or inadvertent/innocent.  Third, the three questions referred to at §60 of King LJ’s judgment are questions to be answered by the judge at the trial of the set aside application.  In the present appeal, we are concerned with an interlocutory decision of the Judge on whether to permit expert evidence to be adduced at such a trial.  This difference should be borne in mind when considering the relevance and admissibility of the expert evidence on French law proposed to be relied upon by H at the trial of the Action.

31.At §20 of Au-Yeung J’s decision mentioned above, she also identified the main issues disclosed on the pleadings to be determined at the trial:

(1)  Misrepresentation or material non-disclosure: whether W had misrepresented or failed to disclose the 2 Matters, and whether it was intentional or inadvertent (issue 1);

(2)  Obligation: whether W was obliged to disclose the 2 Matters to H (issue 2);

(3)  Reliance: whether H had relied on W’s misrepresentation or non-disclosure (issue 3);

(4)  Detriment: whether H has suffered loss/prejudice – including not defending the divorce instead of filing for divorce in France, refraining from deploying the PNA; and entering into the Consent Summonses (issue 4);

(5)  Whether the result of the ancillary relief proceedings would have been the same even with disclosure of the 2 Matters (issue 5); and

(6)  Whether, if the Ancillary Relief Consent Order is set aside, H is entitled to the reliefs claimed (issue 6).

32.Issues 1 and 3 are issues of fact and issue 2 is primarily an issue of law.  The proposed expert evidence on French law would not assist the court in the resolution of those issues at the trial.  However, if H succeeds on issues 1 to 3 at the trial, the questions will arise as to whether H has suffered any loss or prejudice as a result of W’s misrepresentation and/or non-disclosure, and whether the result of the ancillary relief proceedings would have been the same (issues 4 and 5).  It is H’s case that, but for the misrepresentation and/or non-disclosure, he would not have agreed to the Ancillary Relief Consent Order, but would have relied on the PNA in the divorce proceedings (whether commenced in Hong Kong or France).  Although the PNA is not binding or conclusive under Hong Kong law, it is a matter which is relevant to take into account for the proper determination of the appropriate ancillary relief to be granted (Granatino v Radmacher [2010] 3 WLR 1367; SPH v SA [2014] HKFLR 286).  In other words, the PNA is a matter which the court, as a matter of principle, ought to have regard to when considering the issue of the appropriate ancillary relief.  In our view, the proposed expert evidence on French law, which could assist the court in understanding the true meaning and effect of the PNA, is relevant to the issues to be determined, and is thus admissible evidence, at the trial.

33.The Judge erred in his decision to refuse to grant leave to H to adduce expert evidence on French law in the following aspects:

(1)  The Judge takes the view that the only issue to be resolved “is just … whether W had misrepresented and/or failed in her disclosure of the 2 facts that H is now complaining about” (§42 of the Decision), and confines his decision to the relevance of the proposed expert evidence to “the issue that needed to be resolved by [the] Court” (§50 of the Decision).  The Judge has, incorrectly, overlooked the further issues which would arise should H succeed in proving the relevant misrepresentation and/or non-disclosure, ie issues 4 and 5 above.

(2)  The Judge considers that it is only when H has successfully set aside the Ancillary Relief Consent Order that French law would become relevant or be needed, and that even in such a case, the expert evidence will only be needed insofar as the PNA is concerned, for assisting the court in determining ancillary relief, ie whether the parties would be bound by the PNA or otherwise (§43 of the Decision).  For reasons mentioned above, we consider that expert evidence on French law is also relevant for a proper determination of the anterior question of whether the Ancillary Relief Consent Order ought to be set aside.

(3)  The Judge considers that the 2 Matters complained of by H failed the “materiality test” objectively considered (§§44-47 of the Decision).

(a)  In respect of H’s complaint concerning whether W had developed a relationship with any third party, the Judge considers that it is not for H or his legal advisers to decide on materiality.  That may be so, but is not itself a sufficient reason for holding that the alleged misrepresentation or non-disclosure in respect of W’s relationship with T is not material.  The Judge further says that W could not be criticized for not disclosing her relationship or “would-be” relationship with T even if that relationship did exist at the time.  This is, we consider, an issue to be determined at the trial, instead of in an interlocutory application for leave to adduce expert evidence.

(b)  In respect of H’s complaint relating to W’s intention to relocate with the children out of Hong Kong, the Judge says that this relates to the Children’s Consent Order which falls outside the ambit of H’s set aside application. While it is correct that H has made it clear that he is not seeking to set aside the Children’s Consent Order, whether the alleged misrepresentation or non-disclosure in respect of the children was one of the matters which caused H to agree to the Ancillary Relief Consent Order is, we consider, an issue to be determined at the trial.

(4)  The Judge takes the view that the consideration of whether the lack of full and frack disclosure on the part of W led to the making of an order substantially different from the Ancillary Relief Consent Order which the court would have made if such disclosure had taken place is only of relevance at the trial, and not at the stage of seeking leave to adduce expect evidence (§§48-49 of the Decision).  In our view, the proposed expert evidence is relevant to the question of whether, but for the alleged misrepresentation / non-disclosure on the part of W, a substantially different order would have been made by the court.  While that question is one to be determined at the trial, the issue of the relevance and admissibility of the proposed expert evidence should be determined at the stage of the application for leave to adduce expert evidence.

34.We bear in mind that the decision sought to be challenged in the present case is a case management decision of the Judge involving an exercise of discretion.  Mr Richard Todd, QC refers us to the judgment of Kwan JA (as she then was) in Wong Kar Gee Mimi v Severn Villa Ltd, [2012] 1 HKLRD 887, at §31, where it was said that case management decisions are only subject to appeal in rare circumstances.  The appellant faces a “very high hurdle” and must show that the judge “has gone clearly wrong and made orders which will clearly involve an injustice or an inability for the trial court to carry out its task”, or if the judge “erred in principle or the order was irrational having regard to the issues that had to be resolved”. Generally, an appellate court will not interfere with a judge’s exercise of discretion unless the judge had misunderstood the law or the evidence or the exercise of discretion was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible.  In the present case, we consider the Judge to have erred in law or principle, and thus the Court of Appeal is entitled to exercise the discretion whether to grant H leave to adduce expert evidence afresh.

35.We accept Mr Todd’s submission that H has delayed in making the application.  We do not accept Mr Scott’s submission that H’s delay can reasonably be explained on the basis that the proceedings had not progressed between February 2019 to January 2021 due to W’s application to transfer the Action from the High Court to the Family Court.  We do not see why the transfer application should affect H’s application for leave to adduce expert evidence, which he stated in his Timetabling Questionnaire would be made on or before 3 October 2018, ie prior to the date of the transfer application. Regardless of the venue of the trial, on H’s case, expert evidence on French law would be relevant and necessary.  There was no reason why H could not have applied for leave to adduce expert evidence while W’s transfer application was in progress.  Further, H could have raised the issue of expert evidence in the Consent Summons dated 27 May 2021, but failed to do so without any, or any good, explanation[2].

36.These having been said, taking into account the relevance of the proposed expert evidence to the issues to be determined at the trial and that the dates of the trial (which had been adjourned because of public health reasons to late November 2022) should not be affected by granting leave to H to adduce expert evidence, we do not consider H’s delay to be fatal to his application for leave to adduce expert evidence.  We shall further consider the issue of delay in the exercise of our discretion on costs below.

37.Having reached the above conclusions, it is unnecessary for us to examine the other grounds of appeal in the Notice of Appeal individually.

DISPOSITION

38.For the above reasons, at the conclusion of the hearing on 7 June 2022, we allowed H’s appeal, set aside the Judge’s order dated 30 November 2021 dismissing the Summons, and made an order in terms of §§ 1 and 2 of the Summons.  We also gave consequential directions regarding the filing and service of W’s expert report on French law, joint expert meeting, and preparation of joint expert report.

39.In relation to the issue of costs, although we have allowed H’s appeal, we consider that he has significantly delayed in his application for leave to adduce expert evidence.  Had he made the application earlier (as indicated in his Timetabling Questionnaire), we believe that the parties would probably have resolved the matter by consent.  Even if H only raised the matter at the stage of the Consent Summons dated 27 May 2021, we doubt whether the application would have been so heavily contested.  In all the circumstances, we make the following orders:

(1)  costs of and occasioned by the Summons in the court below (including all reserved costs) be in the cause, with certificate for 2 counsel (where applicable); and

(2)  costs of the appeal (including the costs of the applications for leave to appeal to the Judge and the Court of Appeal) be to H, to be taxed if not agreed with certificate for 2 counsel.

40.In relation to the costs under §39(2) above, we further make an order nisi that such costs may not be taxed without leave of the court, in view of the fact that, apparently, W has obtained cumulatively a total of 15 judgments against H arising out of these proceedings, and we do not have information about the costs orders in those judgments (including whether there is any outstanding costs or costs order in W’s favour).  The order nisi (relating to the question of taxation) shall become absolute unless an application to vary is made within 14 days from the date of this order.

Mr Richard Todd, QC, instructed by Withers, for the Petitioner/Defendant

Mr John Scott, SC & Ms Madeleine Booth, instructed by Oldham, Li & Nie, for the Respondent/Plaintiff