M v. C

FCMC 8147 / 2014

[2021] HKFC 220

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 8147 OF 2014

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J U D G M E N T
(LEAVE TO APPEAL OUT OF TIME)

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1.This is an application by the Respondent husband (“Father”) for leave to appeal against Order (1) in paragraph 175 of the judgment handed down on 4 December 2020 (“Judgment”).  

2.After a five-day trial about the applications :- (a) of the Father for variation of periodical payments downwards; (b) of the Petitioner wife (“Mother”) for variation of periodical payments upwards; and (c) of the Mother for attachment of income order, I ordered in the Judgment that all 3 applications be dismissed, with no order as to costs on a nisi basis.

3.The Father filed the Summons for leave to appeal on 14 May 2021 against Order (1) in paragraph 175 of the Judgment that “the Father’s application for decreasing the maintenance be dismissed”. The Father filed an affirmation explaining the reasons why the application was made out of time on the same day. The “Draft Grounds of Appeal” (“Draft Grounds”) and the “Written Statement Submission” were also filed on the same date.

4.The Court had given directions in relation to the proceedings of the case, including the filing of affidavits or submissions in opposition, and that the application is to be dealt with by way of paper disposal.

5.The Mother opposed to the application, and she filed an affidavit dated 20 May 2021, opposing to the Father’s application.

6.I refer to the background of the case which I had set out in paragraphs 3 to 32, 42 and 45 of the Judgment. The Order dated 26 August 2014 by consent (“2014 Order”) about the overall settlement of Children matters and ancillary relief issues is the order the parties are applying for variation, with the major terms included in paragraphs 8 and 9 of the Judgment. This ruling has to be read together with the Judgment. I shall adopt the same abbreviations as in the Judgment, unless otherwise specified.

The legal principles

7.The legal principles governing applications for leave to appeal from the District Court is provided in section 63A(2) of the District Court Ordinance, Cap. 336:-

“Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

8.The court has a discretion to grant leave to appeal out of time. The factors for consideration are :-

(a)  The length of delay;

(b)  The reason(s) for delay;

(c)  Prospect of success of the intended appeal application;

(d)  Whether the grant of leave to appeal out of time would cause prejudice to the opposite party.

(See: LSW v LMYM, HCMP 1085/2006; 黃 對 潘 HCMP 2749/2014)

The Father’s proposed grounds of appeal

9.The Father had provided detailed draft grounds of appeal of 64 pages, containing 81 paragraphs, which can be summarised as follows :- 

(1)  Failed to apply the Edgar principle under the case AEM v VFM [2008] HKFLR 106

(2)  Failed to consider all the circumstances required under section 11(7) of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”)

(3)  Erred in the consideration of third party resources and possible inheritance as the financial resources of the Father

(4)  Failed to apply the principles as stated in LKW v DD (2010) 13 HKCFAR 537

(5)  Failed to consider the “net effect” of the 2014 Order

(6)  Erred in taking into account irrelevant factors

(7)  Failed to take into account the objective of independent living to be achieved

10.For some of the above proposed grounds of appeal, there are different sub-headings or sub-paragraphs further explaining the proposed grounds of appeal.

Discussion

Application made out of time

11.It is not in dispute that the Father took out this application for leave to appeal out of time. The Judgment was handed down on 4 December 2020, with the Father taking out this application for leave to appeal on 14 May 2021, which was out of time for slightly more than 3 months.

12.In the Father’s affirmation filed on 14 May 2021, he explained the reasons why there was delay and referred to his earlier affirmation filed on 4 January 2021, in which the Father asked for, inter alia, “pending the clarification by the Court on the order and applications for the above, the father would apply for extension of the application for leave to appeal on the judgment such that the issue could be resolved by the court and the parties without the need to appeal which would have resource implications for both parties and the court”. The Court issued requisitions on 8 January 2021 stating that what the Father asked for is vague and further gave directions that “if the [Father] intends to take out application(s) in relation to paragraph 5(a) to 5(d) stated in the said affirmation, please take out proper application by way of summons”.

13.No application had been taken out by the Father until 14 May 2021. But it is noted that after the Judgment was handed down, there were applications taken out by the Mother for variation of costs order nisi and for leave to appeal out of time, which the Father needed to file affirmations in opposition.

14.It is noted that the Father’s application for leave to appeal out of time may prejudice the Mother, as she may face difficulties and further delay in enforcing the Court’s order and the outstanding amounts to be recovered. Upon due consideration, I am not convinced that the reason for delay is justified.

15.However, the more important factor to consider is whether the Father will have a reasonable prospect of success in his intended appeal. Therefore, I will still go through each of the intended grounds of the Father applying for leave to appeal.

16.Before I start with each of the proposed grounds of appeal in turn, I have to emphasise that it is not possible to address each of the points raised in the 64 pages of the “Draft Grounds of Appeal” of the Father. I have considered all the content therein. Not mentioning a particular point should not be taken as not having considered the point. It is only practicable to approach and summarise the Father’s Draft Grounds, and to explain my reasons in a practicable and manageable manner.

(1) Failed to apply the Edgar principle under the case AEM v VFM [paragraphs 8 to 17 of the Draft Grounds]

17.The Father submitted that although I have made reference to the case AEM v VFM in the Judgment, I have omitted to refer to and correctly apply the Edgar principle cited in the case AEM v VFM, which the Father cited paragraphs 44 to 45 in AEM v VFM in paragraph 8 of the Draft Grounds :-

“The well established principle in Edgar is that in considering the application for financial provision the Court is required to have regard to all the circumstances of the parties and the existence of a prior agreement was an important aspect which should be looked at having regard to the conduct of the two parties, both leading up to the agreement and subsequent thereto, and the Court should bear in mind that formal agreements, properly and fairly arrived at with competent legal advice, should be given effect to unless good and substantial grounds were shown for concluding that injustice would be done by holding the parties to the terms of the agreement.

This approach was recently affirmed by this Court (Stock, Yuen JJA and Hartmann J) in L v C [2007] 3 HKLRD 819.” (emphasis added)

18.The Father further referred to a number of cases which had applied the legal principles, including Royal Bank of Scotland Plc v Etridge (No.2) [2002] UKHL 44 and X v X (Y & Z Intervening) [2002] 1 FLR 508. It is the Father’s case that “the Judge had misdirected herself with regard to failure to apply the above cited legal principles in leading cases in correctly applying the relevant principles under AEM, Edgar, Royal Bank of Scotland Plc, X v X among others to the case and the evidence in accordance with which her discretion had to be exercised”.

19.In the Judgment, I did not refer to the case Edgar or those cases suggested by the Father, but I referred to, considered and applied the case AEM v VFM, which had clearly stated the well established legal principles in the application for variation of maintenance. There is no need for me to list out the case Edgar, or any other cases repeating and expounding the same legal principles.

20.I have considered the background of the parties prior to the entering of the 2014 Order in paragraphs 1 to 8 of the Judgment. I have also considered the Father’s complaints and submissions about the Mother’s conduct in relation to the 2014 Order, which included :-

(a)  the Fathers’ allegation that the 2014 Order was entered into by pressure and at a time when he was not well psychologically (refer to paragraph 44 of the Judgment);

(b)  the Father complaining about the Mother having caused him emotional stress and pressure (refer to paragraph 158 of the Judgment); and

(c)  the Father pointing out that the Mother got a larger proportion of the sale proceeds of the Shanghai Property and the sale proceeds of the Discovery Bay Property, and she got cash in bank, making the 2014 Order not agreed on fair terms (refer to paragraph 152 of the Judgment).

21.This is a divorce case started in 2014 and parties have many allegations against each other all along. It is impossible for the court to refer to and cite each of these allegations. I did consider the background and circumstances of the case, and evidence and submissions from the parties. I have also considered the Father’s complaints and his submissions in relation to the 2014 Order. The evidence of the case had been thoroughly considered and the relevant legal principles had also been considered and applied.    

(2) Failed to consider all the circumstances required under section 11(7) of MPPO [paragraphs 18 to 45 of the Draft Grounds]

22.Under this intended ground, there are different aspects under sub-headings submitted by the Father as follows :-

(a)  “Unilateral act of the [Mother] in exercising undue influence to obtain an unfair advantage against the [Father] and depriving the [Father]’s means to seek competent legal advice during the mediation and in the drawing up of the 2014 Consent Order” [paragraphs 20 to 27 of the Draft Grounds]

(b)  “Abuse of trust and undue influence exercised by the [Mother]” [paragraphs 28 to 34 of the Draft Grounds]

(c)  “Conduct of the [Mother] as ‘obvious and gross’” [paragraphs 35 to 41 of the Draft Grounds]

(d)  “Basis of consent order in question hence the weight to be attached should be reconsidered” [paragraphs 42 to 43 of the Draft Grounds]

(e)  “Terms of the consent order themselves not in accordance with established legal principles and hence compiling to the consent order would lead to injustice outcome” [paragraphs 44 to 45 of the Draft Grounds]

23.In applying s.11(7) of MPPO, I should have regard to and consider all the circumstances of the case, including any change in any of the matters to which the court was required to have regard to when making the order to which the application relates. In other words, I should have regard to the conduct of the parties and all the circumstances of the case, including the matters as stated in s.7(1)(a) to (g) of MPPO, wherever applicable.

24.With reference to s.7(1)(a) of MPPO, I have considered “the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future” :-

(a)  in paragraphs 46 to 63 of the Judgment for the Mother;

(b)  in paragraphs 64 to 75 of the Judgment for the Father; and

(c)  in paragraphs 76 to 85 of the Judgment of the financial resources of the parties.

25.With reference to s.7(1)(b) of MPPO, I have considered “the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future” :-

(a)  in paragraphs 86 to 113 of the Judgment for the Mother; and

(b)  in paragraphs 114 to 133 of the Judgment for the Father.

26.With reference to s.7(1)(c) of MPPO, I have considered “the standard of living enjoyed by the family before the breakdown of the marriage”, which is in paragraphs 42(c) of the Judgment.

27.With reference to s.7(1)(d) of MPPO, I have considered “the age of each party to the marriage and the duration of the marriage”, which is stated in paragraphs 42(a) of the Judgment.

28.With reference to s.7(1)(e) of MPPO, I have considered “the physical or mental disability of either of the parties to the marriage”, which is in paragraphs 72 to 75 of the Judgment.

29.With reference to s.7(1)(f) of MPPO, I have considered “the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family”, which is in paragraph 154 of the Judgment.

30.In relation to the sub-headings under this draft ground as cited in paragraph 22 above, I have considered the conduct and behaviour of the parties as alleged in their evidence and in their submissions (as stated in paragraphs 29, 44, 155 and 158 of the Judgment). In the Judgment, I did not spell out under different sub-headings as submitted by the Father, but I did consider all the allegations by the Father.

31.In relation to the terms of the 2014 Order and the circumstances in relation to the reaching of settlement agreement between the parties, which subsequently forms the 2014 Order by consent, I repeat my analysis in paragraph 42, 44, 45, 148 to 152 of the Judgment.

32.All the circumstances as required under section 11(7) of MPPO had been considered.

(3) Erred in the consideration of third party resources and possible inheritance as the financial resources of the Father[paragraphs 52 to 62 of the Draft Grounds]

33.The Father submitted that I have misguided myself and failed to apply the relevant legal principles in the case KEWS v NCHC (Contribution by Third Parties) [2013] HKFLR 180, by taking into account financial resource of the Father arising from possible inheritance from the mother of him. Further, the Father submitted that I have failed to consider and evaluate “the likelihood of such assistance continuing in the foreseeable future as a critical evidential requirement”, as some amounts given by the Father’s mother, such as HK$200,000 as wedding gift, was a one-off incident only.

34.My analysis about the financial resources of the parties, including financial assistance from their family, are included in paragraphs 76 to 85 of the Judgment.

35.Although I did not cite the case KEWS v NCHC, I have not lost sight of or erred in the application of the legal principles involved therein. I had not included in my calculation of periodical payments or expected any regular sums from the Father’s family as third party assistance to the Father. My analysis in this area is summarised in paragraph 85 of the Judgment, which I stated that “I understand there is uncertainty of the possible estate to be received……”. I have considered these possible estate or inheritance to be received in the context of possible future financial resources of the parties under section 7(1)(a) of MPPO.

36.Apart from the HK$200,000 the Father’s mother had given to him as a one-off wedding gift, he had received from her several sums of money in 2017, which I had summarised in paragraph 81 of the Judgment, amounting to a total sum of HK$2,494,500 (HK$580,000 + HK$880,000 + HK$34,500 + HK$1,000,000).  

(4) Failed to apply the principles as stated in LKW v DD [paragraphs 63 to 72 of the Draft Grounds] 

37.The Father submitted that I have :-

(a)  “omitted to follow the principles and steps in interpreting section 7 of MPPO as provided for in LKW v DD” [paragraphs 63 and 65 of the Draft Grounds]; and

(b)  “biased against the [Father]” and “misguided herself in regard to the principle of non-discrimination on the basis of gender and ignoring the financial needs of the [Father] and failing to take into account the financial assets and income as well as the earning capacities in determining the level of maintenance to be paid by the [Father]” [paragraphs 67 and 72 of the Draft Grounds]

38.Important and binding legal principles had been stated in the case LKW v DD, in which ancillary relief claims were heard and ruled in that case. I have to stress that for the present case, it is not for the Court to re-do ancillary relief application for division of assets between the parties, therefore the 5 steps as stated therein need not be adhered to.

39.The Father further submitted that there was no equal division of assets from the 2014 Order, which I had considered in paragraphs 151 and 152 of the Judgment. There is no failure to apply the legal principles in LKW v DD, where applicable.

40.In this case, ancillary relief matters had been settled between the parties with the 2014 Order by consent. The Court is to consider whether or not the periodical payments ordered in the 2014 Order be varied.

41.In the exercise of the power by s.11(7) of MPPO, the Court shall have regard to all the circumstances of the case, which I repeat my analysis in paragraphs 23 to 32 above, in which financial needs, assets, income and earning capacities of the parties had been considered, before determination of the level of maintenance to be paid by the Father. The situation and circumstances of each of the parties had been considered and there was no bias against the Father or for a particular gender.    

42.The Father submitted that I did not consider and take into account the updated status of the financial assets. For example, I focused on the 9 properties the Father bought in about 2016 to 2017, instead of ascertaining whether those properties are of value now or had been forfeited as the Father alleged.

43.I have to stress that a judge hearing matrimonial cases has to exercise the quasi-inquisitorial power in a practicable manner with case management consideration in mind. I did consider the properties owned by the parties and their financial resources with all the evidence before the Court, taking into account the discovery exercise previously conducted. Bearing in mind it is trite that he who alleges must prove, as it is the Father’s case that some of the properties had been forfeited, he bears the burden to prove his case.

(5) Failed to consider the “net effect” of the order [paragraphs 46 to 51 of the Draft Grounds]

44.According to the Father, “an order for periodical payment should not be made unless and until the actual impact of the order has been considered by the court”, which is known as the “net effect method” [refer to paragraph 46 of the Draft Grounds].

45.The Father further submitted that I ignored the “net effect method” and I “should have taken into account the financial needs of the [Father] and decided on a maintenance level which should have taken into account resources and incomes of both parties and affordable to the [Father] [refer to paragraph 48 of the Draft Grounds].

46.I did not refer to the “net effect method” principle in my Judgment, but I did consider the actual impact of the order by considering the ability to pay of the Father. I did consider the financial needs of the parties, including the Father (see paragraphs 114 to 133 of the Judgment), and also the financial resources, income and earning capacity of both parties (see paragraphs 46 to 85 of the Judgment).

47.My analysis of the Father’s ability to pay is included in paragraphs 147 to 167 of the Judgment. In particular, I have evaluated the evidence of the Father in the context of whether there is full and frank disclosure of his financial circumstances (refer to paragraph 140 to 143 of the Judgment), and I formed the view that inference is to be drawn of his ability to pay, for the reasons as explained in paragraph 144 of the Judgment.

(6) Erred in taking into account irrelevant factors [paragraphs 73 to 79 of the Draft Grounds]

48.The Father submitted that I have erred in taking into account irrelevant factors, in particulars the matters as stated in paragraph 142(a) to (e) of the Judgment.

49.I have to stress that there is the duty of the parties to have full and frank disclosure of the financial circumstances.

50.With the legal principles as stated in LKW v DD that the court should reject a minute retrospective investigation, some analysis still has to be done by the Court, especially in the context of analysing the allegation that the other party had not disclosed fully and frankly the financial circumstances.

51.After consideration of the allegations and evidence before the Court, I did not form the view that either the Mother or the Father had been dishonest or intentionally misleading the Court (refer to paragraph 135 of the Judgment), but I am of the view that the Father should have disclosed fully the documents he had been asked to produce, so that the Court can have a full picture of the financial circumstances. I refer to my analysis in paragraphs 143 to 146 of the Judgment. I am not of the view that irrelevant factors had been taken into account.

(7) Failed to take into account the objective of independent living to be achieved [paragraphs 80 and 81 of the Draft Grounds] 

52.The Father is of the view that I should have taken into account the objective of independent living to be achieved and hence should have taken into account the earning capacity and financial resources of the Mother in the ruling.

53.The Father further submitted, in paragraph 81 of the Draft Grounds, that “it is an unfair outcome in the Judgment given by the court since the resources of the [Father] could not allow him to support himself, his children, and his new family in a sustainable manner, while the undisputed earning capacity and the financial incomes of the [Mother] arising from matrimonial resources are not being taken into account”.

54.I have not lost sight of the reality that after divorce, it is expected that each party should start a new life (refer to paragraph 161 of the Judgment).

55.Further, I did take into accounts the matrimonial and financial resources, income, earning capacity and financial needs of the parties, as I explained and repeated in earlier paragraphs.

56.Before I made the ruling, I did consider carefully, in a separate section in the Judgment of “What should be the reasonable sums of maintenance to be ordered” (refer to paragraphs 147 to 167 of the Judgment). In particular, I have to point out the following :-

(a)  I have not lost sight of the financial difficulties faced by the Father, especially in view of the amount of liabilities, including :- (i) while paying for rent, he has to pay for mortgage payment of the LG Property and (ii) repayment of loans.

(b)  I have considered the financial needs for accommodation of the Father and his new family (refer to paragraphs 119, 120 and 162(e) and (f) of the Judgment).

(c)  About the repayment of loans, I accept that they are actual debts (refer to paragraph 162(c) of the Judgment), but at the same time, I have considered and ruled that these financial difficulties were self-induced, not caused by the Mother or by the 2014 Order (refer to paragraph 162(g) of the Judgment).

(d)  With my analysis and ruling, I am of the view that with the re-arrangement of some of the 9 properties of the Father, such as selling some of them, some of the corresponding financial liabilities will be gone and he will have the ability to pay the amounts ordered by the Court.

Conclusion and order

57.This is a divorce case in 2014. Both parties had made various allegations against each other. There are various matters involved. It is impracticable, if not impossible, to include each and every allegation of the parties against each other in the Judgment. I have considered all the evidence and submissions made, and had summarised, as much as possible, all the main points considered in the Judgment.

58.Before reaching the conclusion, I have considered all relevant factors, including the 2014 Order and the relevant complaints and submissions in relation to the 2014 Order. I repeat paragraphs 147 to 163 of the Judgment.

59.With the reasons aforesaid, the Father has failed to show that he has an arguable case on any of the proposed grounds. I am of the view that the intended appeal has no reasonable prospect of success. Further, I am of the view that there are no other reasons in the interests of justice why leave to appeal should be granted. Therefore, the application for leave to appeal out of time must be dismissed and I so order.

Costs

60.Generally, costs should follow the event. In view of the background of this case and the parties now act in person, together with the 3 applications in total arising from the Judgment taken out by the parties (this application, the application taken out by the Mother for leave to appeal out of time and the application taken out by the Mother for varying the costs order nisi), I am of the view that there should be no order as to costs, including all costs reserved, for this application. This is a costs order nisi, which shall be made absolute within 14 days.

The Petitioner acted in person

The Respondent acted in person