Adele Nordica Park v. John Mitchell Park

HCMP000501/1978

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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Coram: Mr. Registrar Cruden in Chambers.

Date of Judgment: 16th November, 1978.

Mr. J. Bleach instructed by Wilkinson & Grist for the applicant.

Mr. R. Mills-Owens instructed by Johnson, Stokes & Master for the respondent.

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DECISION

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1. This is an application under Rule 68(2) of the Matrimonial Causes Rules Cap. 179 for liberty to apply for a lump sum and property adjustment order, notwithstanding that a claim for the same was not made in the petition in Divorce Action No. 15 of 1959. In that Action the decree nisi was granted on the 18th day of July, 1959 and was made absolute on the 18th day of February, 1960.

2. A preliminary consideration was whether the provision for a lump sum payment under s.4(1)(c) of the Matrimonial Proceedings and Property Ordinance Cap. 192 is retrospective. Provision for lump sum payments was first enacted in Hong Kong under Section 28 of the Matrimonial Causes Ordinance No. 1 of 1967 which came into force on the 19th day of January 1967. Section 28 was based on Section 16 of the English Matrimonial Causes Act 1965. In 1972, Section 28 was repealed by Section 33 of the Matrimonial Proceedings and Property Ordinance, Cap. 192. It was replaced by what is now Section 4(1)(0). As to whether the provision for lump sum payments was retrospective, there is no material difference between these various Hong Kong and English sections. None of them expressly makes the power to award a lump sum retrospective. This was one of the reasons which led Sir Jocelyn Simon, P., as he was then, in H. v. H. (1966) 3 All E.R. 560 to hold that the English provision was not retrospective. The contrary view, which is now accepted in England, was first advanced in detail by Brandon J. in Powys v. Powys (1971) 3 All E.R. 116. More recently that view has been upheld by the English Court of Appeal in Chaterjee v. Chaterjee (1976) Fam.199. There does not appear to be any reported Hong Kong decision on whether our provisions are retrospective. In the light of the similarity of the sections and the position which is now settled in England, Counsel for the respondent sensibly accepted that our Section 4(1)(c) too, is retrospective. I am satisfied that it is retrospective. Therefore even though the marriage between the parties was dissolved nearly 7 years before the power to award a lump sum was introduced, a Court now clearly has jurisdiction to make such an order.

3. There was also no dispute that the proper procedure, on an application for leave, is that set out in S. v. S. 'The Times' dated 3.12.73. In referring to the obligation to first obtain leave, Ormrod J., as he then was, is reported as saying:-

4. At no stage did the parties invite me to treat this application for leave, as the substantive application. Arguments were therefore limited to the question of leave. However, it was necessary to go into the factual background in some detail. In view of the considerable period of time involved and the respondent's strongly argued objection to the application on the grounds, inter alia, of unjustifiable delay, intervening change of circumstances and that he had been lulled into the belief that all claims from the applicant had been long settled, it may be helpful to set out the chronological progression of events, without expressing any view as to their relevance or importance:-

5. As to delay, the applicant states that she had not previously made any application for a lump sum or for variation of the 1960 order for periodical payments. This was in part due to the fact that the periodical payments order was expressed in Hong Kong dollars. In 1960 it was equivalent to about $150 per month, but due to the continual fall in the value of sterling, it now equals, in her hands, nearly $300 per month. The applicant has lived in England since the parties separated in 1954. She never lived in the Lugard Road property. At present she lives in private rented furnished accommodation which consists of a 1 bedroom bungalow. The parties son, Bruce, now aged 27, lives with her. Since the accident in 1977 he has been under the direction of a psychiatrist as an out-patient. She deposes that it is doubtful whether Bruce will ever be able to cope with other than a manual job and states that in the circumstances she must take care of and provide for him. His periodical payments, of course, ceased many years ago. If a lump sum payment were granted the applicant would apply it to purchase a small house for her own and her son's use. As to the respondent's circumstances she asserts that notwithstanding the mortgage of $400,000 recently raised on the Lugard Road property to enable him to discharge his capital obligation to his second wife under the Court Order of 18.7.77, there remains a substantial equity in that property. Not only would that enable him to provide the lump sum she would seek, if leave is granted, but the respondent's income is sufficiently adequate, she submitted, to enable him to service the increased loan charges.

6. The respondent states that the delay on the part of the applicant has been excessive. Since 1960 until now she had not filed an application for any increase in periodical payments. Since 1967 she had the right to apply for a lump sum but has only done so after a lapse of 11 years. The legal dependency of the son has long since passed. His position was not relevant to the present application. During the intervening years the respondent has substantially altered his position and has had his position altered by the Court. He has altered his own position by remarrying. He also has to organise his financial affairs in the light of his impending retirement on the basis of his hitherto settled obligations to his two former wives. In addition, under the Order of 18.7.77 he has had his financial affairs altered by the Court in contested proceedings. Furthermore, the learned Registrar in those proceedings, ordered financial provision to be made for the second wife, after first expressly taking into account the settled obligation to the applicant, as the first wife, of $2,500 per month. In those circumstances, the respondent submitted, not only had there been delay and a major change in circumstances but the applicant's conduct had lulled the respondent into the belief that all claims by her had been settled. This was also a case where it was undisputed that the monthly payments of $2,500 had been made by the respondent fully and promptly since the date of the Order in 1960. The respondent further points out that the son's dependency has long since passed. If the applicant's expenses have increased due to inflation and the increased burden she may have accepted as a result of looking after Bruce since the accident, then those claims, if substantiated, it was submitted, could properly be met, in the contemporaneous proceedings, to vary the order for periodical payments.

7. In addition to S. v. S. and Chaterjee v. Chaterjee both Counsel also referred to Roberts v. Roberts (1968) P.1, and McKay (formerly Chapman) v. Chapman (1978) 1 W.L.R. 620. There was no real dispute as to the law. Any difficulty is in applying the law to the instant facts. The relevant principles relating to the present application are summed up by Ormrod L.J. in Chaterjee v. Chaterjee at page 208:-

"In my judgment, the court ought not to refuse leave to apply in any case in which on the evidence the applicant has or appears to have reasonable prospects of obtaining the relief claimed, or, to put it in another way, has a seriously arguable case. It will not be enough merely to demonstrate that on the one third yardstick the applicant can make a case on the figures (as certain passages in the judgment of Arnold J. in the present case seem to suggest). To assess the prospects of success (as indicated by Davies L.,J. in Jones v. Jones (1971) 3 All E.R. 1201) all the facts referred to in section 25 of the Act of 1973, including, in particular, practicability and conduct, in the sense of the way in which the parties have conducted themselves and their affairs up to the time of the application, must be considered. Delay, if it really is delay in the sense of prejudicing the other party, may have an important influence on the justice of the case. So may conduct which can be described as "lulling" the other party into the belief that all claims have already been dealt with. Similarly it may be unjust to interfere with property rights after a lapse of time during which the other party has ordered his or her affairs in a reasonable and proper manner in the belief that the financial consequences of the divorce have been settled (as was said in L. v. L. (1962) P.101). On the other hand the purpose of rule 68 will be frustrated if the hearing of the application for leave is made the occasion for a detailed investigation with consequent expense."

8. It will be noted that the onus on an applicant, which Ormrod L.J. 2 years earlier in S. v. S. described as establishing an "arguable" case, has now become a "seriously arguable" case. So the onus has not diminished.

9. In the same judgment Stamp, L.J. adopts what is perhaps a slightly more onerous standard. At page 209 he declared:-

"As Ormrod L.J. has pointed out, the broad intentions of requiring a would-be applicant to obtain leave is to protect the other party from harassing tactics. And where that other party has over so long a period been led to believe that no such application would be made, leave should in my view, unless there are exceptional circumstances, be refused. And this must I think be so despite the anomalies to which Ormrod L.J. has called attention ..."

10. The Court of Appeal held that there did exist exceptional circumstances in that case.

11. The circumstances here, are not as exceptional as in Chaterjee's Case. Counsel for the respondent urged that, at best, the applicant had put forward arguments in favour of variation of periodical payments. He submitted that these maintenance arguments were not relevant on a lump sum application. While they are separate matters in my view the considerations on both kinds of applications are usually inextricably interwoven. For lump sum payments are awarded either instead of or in addition to periodical payments. Both are in the end to meet the financial needs, as to income or capital, of the other party. Capital provision usually has a direct bearing on income requirements. I am not overlooking that there is no power on the variation of a periodical payment order to substitute provision for a lump sum. That position does arise on the present application.

12. Here the applicant explains that the fall in the value of sterling averted the necessity to apply in the past for variation; for the first 7 years after the initial Order there was in any event no statutory power to apply for a lump sum; last year her modest living conditions became even more unsuitable due to the consequences of Bruce's motor vehicle accident. Finally, she submits that even though the respondent's circumstances have changed, he is still reasonably able, both in relation to income, capital resources and his new obligations, to provide the lump sum she seeks.

13. I appreciate the force of the respondent's submissions that there has been a major change in his position; that on his own budget he has only a modest surplus which is needed to prepare for his retirement; that even if the value of the Lugard Road property would allow it to be further encumbered, he may not have the income to service the increased interest and other loan charges; that he is under no legal liability towards his 27 years old son; if the applicant's expenses have increased because of her election to look after Bruce, that might be a matter relevant on her application for variation of periodical payments, but is irrelevant to this application. In considering the provision made for the second wife I recognise too, that it is important to take into account the substantial capital contributions she made to that marriage.

14. In very many cases, in the absence of other factors, the delay and change of circumstances which have occurred in this case, might well disentitle an applicant. I am aware too, that financial disparity between the parties similar to that found here, is not by itself, an accurate indicator of the prospect of an applicant's ultimate success.

15. However, it is undesirable, in an application for leave, to go into the facts at undue length. What I am satisfied of, after reviewing all the circumstances, is that the applicant on the substantive issue probably has a seriously arguable case. There are clearly important matters of fact and law to be argued. I am also satisfied that if leave were granted it would not be oppressive nor would it result in the respondent being harassed.

16. For these reasons I am prepared to grant leave for the applicant to apply for a lump sum and property adjustment order.

17. I further order that the costs of and occasioned by this application shall be costs in the cause. There will also be a Certificate for Counsel.

18. Dated the 16th day of November, 1978.

Representation:

Mr. J. Bleach instructed by Wilkinson & Grist for the applicant.

Mr. R. Mills-Owens instructed by Johnson, Stokes & Master for the respondent.