Wtm v. Lnca

FCMC 14571/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 14571 OF 2010

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BETWEEN

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DECISION

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1.This is a hearing concerning the procedure of how a consent order finally disposing of the parties’ ancillary relief claims upon divorce can be set aside. It has been a subject of a divergent opinion.

Brief Marital and Procedural Background

2.The Petitioner Husband and the Respondent Wife married on 16^th August 2005. The only child of the family was born in November the same year and is now aged 6.

3.The parties came from grassroots. Through the Husband’s hard work and the Wife’s devotion as a homemaker, their effort got paid off eventually. The Husband’s logistic business grows and he is the owner of several companies holding his logistic business and some landed properties.

4.However, by 2009 the marriage had broken down. They contemplated a divorce and eventually had come to terms prior to issue of a formal petition. Lawyers were involved at certain stage of the agreement. On 5^th November 2010, the Husband petitioned through a firm of solicitors for a divorce based on the facts of one-year separation with the Wife’s consent. She was unrepresented throughout the divorce proceedings.

5.It was pleaded in the Petition that certain agreement or arrangement has been made or was proposed to be made between the parties for the support of the Wife and the child of the family. In so far as they related to financial matters they are[1]:

i)  the Husband do pay the Wife a monthly sum of $20,000 as her maintenance and $10,000 as the child’s maintenance; and

ii)  the Husband shall purchase a landed property valued not less than $3 million in the Wife’s name and if the Husband needs to raise a loan from the bank or financial institution to assist the purchase, all mortgage instalments shall be repaid by the Husband until full repayment and the legal costs, disbursements and agency fee shall be borne by the Husband solely.

6.Custody of the child is never an issue between them. In the prayer of the same Petition, the Husband asks for financial arrangement basically same as above. In addition, he requested the Wife to vacate the matrimonial home at Baycrest within 2 months of the purchase of the aforesaid property. 

7.On 13^th January 2011, the Husband’s solicitors filed a consent summons signed by both parties dated 16^th December 2010.  The summons basically comprised two parts, namely, (i) agreements and undertakings of the parties to each other and to the Court; and (ii) orders of this Court.  It provided, inter alia, that custody of the child of the family be granted to the Wife and the Husband has reasonable access. In respect of financial arrangement, apart from embodying the agreed terms as stated in the petition, the following two additional terms in the form of agreements and undertakings to each other and to the Court were also included:

i)  the Husband shall pay the Wife costs of decoration of the property to be purchased and furniture up to a sum of $0.15 million within one month from completion of purchase of that property; and

ii)  the Husband shall purchase a life insurance policy, valid for 13 years from the date of Decree Absolute, for the sum of HK$4 million in the Wife’s name with the Wife being the sole beneficiary thereof.

8.When the consent summons was filed, there were annexed to it two letters signed by the Wife and addressed to the solicitors for the Husband both dated 16^th December 2010. The two letters set out the terms of agreement in respectively Chinese and English, the contents of which were basically the same as the consent summons. It is stated in these letters, inter alia, that the Wife has been advised to seek independent legal advice, and she acknowledged she understood the contents as well as the legal consequence of the consent summons. It is fair to say that both letters are of the same meaning, and one is the translation of the other.

9.A Decree Nisi of divorce was granted in open court on 10^th March 2011. Relying on the parties’ compromise as evidence by the documents filed with Court, no inquires, as in many other cases of consent filed with the Family Court Registry, were directed. These terms set were made orders of the Court in chambers with some amendments (“the Consent Order”). These amendments were made by this Court out of its own motion to deal with the following:

i)  typographical errors;

ii)  to insert the words “care and control” after custody for clarity purpose; 

iii)  to include a removal restriction to the custody order, so that unless there is leave of the Court, or filing of written undertaking by a parent and written consent of the other parent, the child cannot be removed out of the jurisdiction. This is a usual restriction added to custody order unless there are good reasons to the otherwise. It is absent from the consent summons;

iv)  to insert the maximum duration of periodical payment payable to the Wife to reflect the statutory requirements under Section 9 of the Matrimonial Proceedings and Property Ordnance (“MPPO”), Cap 192, and to comply with Section 25(1) of the same Ordinance. The combined effects of which are:

(a)   the maintenance payable prior to the granting of Decree Absolute should be termed maintenance pending suit (“MPS’);  

(b)  the maximum terms for the Wife’s maintenance should be inserted such that it is payable during joint lives of the parties or until the Wife’s remarriage, whichever is the shorter; and

v)  to insert the duration of the periodical payment payable to the child of the family to give effect to Section 10 of the MPPO.  Accordingly, the maintenance payable to the child will cease when the child attains the age of 18 or finishes full-time education, whichever is the later.

10.It was stated in the order, inter alia, that the terms referred to in the order are accepted in full and final settlement of the parties’ claims against each other for periodical payments, lump sum and property transfer under all relevant enactments including MPPO. A declaration that this Court is satisfied with the arrangement of the child of the family under Section 18 of MPPO was also made when the consent order was also granted.

11.This order was perfected and filed with Court by the solicitors acting for the Husband on 11^th May 2011. The Decree Nisi was made Absolute on 18^th May 2011 as certified by the Registrar’s certificate dated 19^th May 2011.

12.It is this Consent Order that is the subject matter of the Wife’s application.

The Wife’s Setting Aside Summons Issued Herein

13.  On 8^th September, 2011, the Wife issued a summons (“settingaside summons”) through her solicitors asking for:

i)  the two paragraphs of the Consent Order relating to periodical payments payable to herself and the child be set aside; and

ii)  leave be granted to the Wife to proceed with her claim on ancillary relief against the Husband for herself and the child of the family.

14.In support of the application the Wife filed a lengthy affirmation affirmed on 5^th September 2011. Her grounds of the setting aside can be broadly summarized as follows:  

i)  misrepresentation and/or non-disclosure on the part of the Husband as to his assets and business profitability. He has undisclosed securities trading account holding stocks that are worth about $10 million as well as landed properties and companies;

ii)  she was depressed when she was advised to find her own lawyers;

iii)  the documents were all drafted in English despite her request that they should be in Chinese, and her English is limited;

iv)  she subsequently signed a number of documents but on those occasions she was not advised to seek independent legal advice. Neither had she been explained the contents of the documents;

v)  there has been breached of the Consent Order;

vi)  the Consent Order approved was different from the consent summons she had signed.

15.I have to say that one find it a bit confused as to the exact basis for the Wife’s application. In Miss Chan’s skeleton[2] submitted on behalf of the Wife, it appears that her counsel based her application on misrepresentation. However, after ready her submission and the Wife’s evidence, it is obvious that the Wife is also relying on material non-disclosure of financial information by the Husband. However, in her submission she has repeatedly referred to “fraud”[3]. It remains for her to clarify whether “fraud”, “misrepresentation” and “failure to make full and frank disclosure” are loosely used by her and that they in fact refer to the same matters i.e. misrepresentation of the Husband’s financial position, or she in facts has other particulars of fraud in mind.

16.Prior to the call-over hearing on 1^st November 2011, the Husband as well as his former solicitor filed affirmations to oppose the application. The Wife, in spite of the expressed order of this Court made at the said call-over that there be no affirmation without leave, put in two further affirmations in response. In her own affirmation, she particularly accuses the former solicitor acting for the Husband, one Mr. Lau, has misled her.

Whether this Court Has Jurisdiction to Re-hear the Matter

17.Though the setting aside appears to restrict to the two orders relating to periodical payments, it is apparent from the Wife’s evidence and her counsel’s submission that she is seeking to re-open her financial claims against her husband. She is not asking for variation of periodical payments based on change of circumstances subsequent to the making of the order which she is always permitted to do under Section 11 of the MPPO. What she now seeks to do is to set aside by the same level of court a final order disposing of her financial claims upon divorce on the grounds of misrepresentation and/or material non-disclosure that existed at the time of the order. A jurisdictional problem arises as to whether the same court has power to do so.

18.At the Call-over hearing on 1^st November, 2011, the Wife was represented by Counsel Miss Dora Chan and the Husband by a solicitor. This Court particularly raised to the parties such jurisdictional issue. As such, the matter was adjourned for argument on this preliminary issue. In order to save time and costs, this Court expressly directed that there be no further affirmations to be filed without leave.

19.In November last year, the hearing this preliminary issue was fixed to be heard at the present hearing.

The Present Application – Leave to Appeal to the Court of Appeal

20.On 20^th January 2012, the Wife issued a second summons (“leave to appeal summons”) returnable on the same date as the setting aside summons seeking, inter alia,

i)  leave to appeal against the two paragraphs of the consent order concerning periodical payments;

ii)  leave to proceed with ancillary relief against the Husband for her and the child of the family;

iii)  leave to withdraw the setting aside summons; and

iv)  leave to rely on her first affidavit filed on 8^th September 2011 in support of her leave to appeal application.

21.Shortly before this hearing the Wife sought to make a technical amendment to the leave to appeal summons to the effect that the appeal against the said two paragraphs is “by setting aside” the two paragraphs.

22.The reasons for such change of course, so far as can be discerned from Miss Chan’s submission, are these. There is a huge amount of case laws which appear to be conflicting and thus in a rather confused state. Some of them suggest the matter can be dealt with either by way of setting aside in the same proceedings or by separate action while others suggest that it can be lodging an appeal. Even if this Court considers it has jurisdiction, the Husband may lodge an appeal which causes delay. Substantial costs would be incurred which eventually would deplete the family assets. Accordingly, Miss Chan submitted, when dealing with question of jurisdiction, which is always costly, and in view of the present state of case laws, with the Civil Justice Review Directive in mind (stressed by Miss Chan), the Wife has decided to elect a “safe course” and invites a higher court, i.e. the Court of Appeal to set aside the consent order. That eliminates the possibilities of the matters being dragged on for long by any subsequent appeal relating to the jurisdiction issue.

23.Presumably, inherent in Miss Chan’s submission, the Court of Appeal has no jurisdictional problem, which appears not controversial; and the Husband would not or cannot appeal, which however, may not be true. Further from what is stated in her submission[4], it appears that according to her, by bringing an appeal, the Wife can dispose of her setting aside and fresh claims faster, though with due respect to Miss Chan, it is difficult to understand the basis for her such conclusion. It remains her submission that by lodging a setting aside in a separate action it would be “… the longest route to get any justice for the victim of fraud”, and therefore the Wife does not see fit to pursue the setting aside summons.

24.So according to her, the leave to appeal route is for procedural convenience and avoidance of argument on jurisdiction. Since Miss Chan’s case is that no new issues have been raised by the additional evidence of the Wife and her brother and the appeal will bring an end to the jurisdictional issue, she invites this Court to dispose of her leave to appeal summons at the present hearing.

The Husband’s Position

25.Mr. Man on behalf of the Husband strenuously opposes the Wife’s application, both procedurally and on merit.

26.Mr. Man submitted, and I do not think it is controversial, that there are only three possibilities for a consent order to be set aside. They are:

i)  setting aside by the parties in the same proceedings in which the consent order is made;

ii)  setting aside by issue of a fresh proceedings in a court of competent jurisdiction; and

iii)  setting aside by lodging on appeal.

27.It is submitted on behalf of the Husband that the first one aforesaid is has been expressly excluded: see Hong Kong Court of Appeal decision in Lui Sik Kuen v Lee Suk Ling [1992] 2 HKLR 371. Although both the second and the third options are possibilities, it is his submission that the appellate avenue is not workable for the simple reason that the Court of Appeal, in situation like the present one where there is no finding of facts, will be in a difficult position to dispose of the appeal by relying on hotly disputed affirmation evidence even though leave to appeal is granted by this Court. Therefore the only workable option is by issue of a fresh proceeding to challenge the order. This is particularly so when there is serious allegation of fraud and misrepresentation on the part of the Husband and his solicitor. By so doing the parties can have the particulars of fraud and misrepresentation fully pleaded and the factual dispute resolved by a trial. The Husband has no objection to meet the Wife’s claim in a fresh action.

28.He therefore invites this Court to deal with the following matters at the present hearing:

i)  whether the Wife should be granted leave to withdraw the setting aside summons. The Husband has no objection but would ask for costs;

ii)  whether the Wife should be granted leave to amend the leave to appeal summons. The Husband does not wish to contest the amendment;

iii)  how the leave to appeal summons should be proceeded with, and the Husband invites this Court to dismiss this summons. If not, the Husband would like directions, including filing of evidence by the parties, be given for arguing the leave to appeal application.

The Court’s View for the Present Hearing

29.I totally agree with Mr. Man’s approach. At the last hearing in November 2011 this Court has expressly directed that the jurisdictional issue will be dealt with first. The merit issue would not be touched upon for the time being. Now the Wife applies to withdraw the setting aside summons. I understand it is a move with a view to avoid the jurisdictional argument. By reasons of what has been discussed in this decision, it is without doubt that the Court of Appeal has jurisdiction on setting aside of consent order. However, a new issue arises, i.e. whether it is appropriate to dispose of a setting aside by way of an appeal when there are serious factual disputes and finding of facts has yet been made.

30.In fact, prior to hearing Mr. Man, this Court has posed to Miss Chan during her submission questions regarding the quality of evidence to be relied on by this Court for the leave application and by the Court of Appeal in the substantive appeal hearing. It is because frauds are now being raised which are very serious allegations. Some of these allegations are even levied against a solicitor. All her allegations are vigorously denied. No court has ever resolved these factual disputes yet. How then the Court of Appeal can in the circumstances adjudicate on the merits of the appeal?

31.It is fair to summarize Miss Chan’s reply as follows: for the purpose of the leave application, affidavit evidence would be sufficient. As for the substantive appeal, the Court of Appeal can direct taking of evidence by the Family Court for its consideration. In the event the consent order is set aside by the Court of Appeal, it will then remit the matter back to the Family Court to adjudicate the financial dispute again.

32.Apparently the suggested procedure is rather unusual. In light of the position taken by the Husband, I consider it necessary to first determine as a preliminary issue whether the appellate route should be dismissed as inappropriate, and if not, what evidence this Court would require for disposal of the present leave application, and in this connection, whether time will be enlarged for such application.

Setting Aside Before the Same Judge/Court in the Same Proceedings

33.Miss Chan has included in her written submission a number of English authorities to show at least three, instead of two avenues are available in Hong Kong for setting aside a consent order for a settlement. These avenues are:

i)  setting aside by the aggrieved party taking out a summons before the judge making the order: see Re C (Financial Provision: Leave to Appeal) [1993] 2 FLR 799, 801C-D, Thorpe J (as he then was);

ii)  bringing a fresh action to set aside the order; and

iii)  lodging an appeal.

34.Mr. Man for the Husband submitted that the first avenue has been expressly excluded by a local Court of Appeal decision which this Court is bound to follow.

35.In Re. C (supra), the wife lodged a leave to appeal and an enlargement of time application against various orders made by district judges concerning her application for ancillary relief. In support, voluminous documents were filed in support. The court accepted that a strong prima facie case had been established. It was held that in order for leave to appeal to be granted, it would be sufficient for the applicant to show a clear prima facie case. However, the learned judge went on to reflect on the procedural issues associated with this type of application. In p.801C Thorpe J (as he then was) had this to say:

“I am in no doubt at all that if an order made by a judge of the Division has been secured by some vitiating factor, then the aggrieved party can reopen the proceedings by the issue of a judge’s summons for which no leave is required. Taking fraud, since it is the most serious of the vitiating elements, it is manifest in my judgment that a litigant whose relief has been denied or depressed by fraud has an absolute right to bring the injustice to the judge at trial and should not be subjected to any sort of prior filter by way of application for leave. By analogy, if the order was obtained from a district judge, the aggrieved litigant should have the same right.”

36.The learned judge was of the view that the matter can even come back before the same judge making the order by issue of a summons, and presumably in the same proceedings. He, however, made no reference to the chapter and verse of any statutory rules from which the application can be made. It is apparent from his short decision that such simple procedure is inherent and is available as of right.

37.In Allsop v Allsop (1981) Fam. Law 18, a husband had deliberately put in a false affidavit of means and an order was made. In the setting aside application the husband admitted the falsities. The order was set aside with an order for rehearing de novo. At the rehearing, however, the husband’s counsel challenged the setting aside and rehearing de novo order. On appeal it was held that where the facts are not in issue and the misrepresentation beyond doubts (as in Allsop because the husband consented to it), there is no justification for gong through the “old fashion procedure by way of action”[5]. From what has been discussed in B-T v B-T [1990] 2 FLR 1, in my judgment, this ratio should be restricted to the special facts of Allsop when both parties consent to the setting aside and the misrepresentation or the fault is beyond doubt[6]. Allsop is not applicable to the present case.

38.Although Miss Chan has not expressed that she has abandoned the argument of setting aside in the same matrimonial proceedings, she does not pursue this avenue apparently because she considers this route unsafe. However, for reasons set out in the following paragraphs, I accept Mr. Man’s submission that this route is not available in Hong Kong.  

39.In Lui Sik-kuen (supra), the Hong Kong Court of Appeal was then dealing with an appeal from a decision of the Family Court allowing the wife to set aside a consent lump sum order on the ground of material non-disclosure on the part of the Husband. In its decision handed down in 1992, the Court of Appeal followed an earlier Privy Council decision in de Lasala v de Lasala [1980] AC 546, which was also an appeal from Hong Kong. In de Lasala, the Privy Council ruled that where a party sought to challenge a judgment or order that finally disposed of an issue between the parties on the ground that it was obtained by fraud or mistake, the only way of doing so was by an appeal to a higher court or by bring a fresh action to set the judgment or order aside.

40.In Lui Sik-kuen (supra), the first instance judge in this Court appeared to take a liberal approach and construed “fresh action” by looking at substance instead of label and therefore accepted the wife application to set aside in the same matrimonial suit. The husband appealed. By then the Hong Kong Court of Appeal had had the benefit of reviewing the several English authorities relied on in the present case by Miss Chan, including B-T v B-T (supra), Jenkins v Livesey (formerly Jenkins) [1985] AC 424 and Robinson v Robinson (Disclosure) [1983] 4 FLR 102. The Hon. Fuad V-P, after reviewing de Lasala and the aforesaid cases, in particular the speech Ormrod, LJ in Robinson concerning the advantage of fresh action over an appeal, stated the following at p.378 line 25:

  “It certainly does not appear that Ormrod, L.J. was seeking to detract from anything Lord Diplock had said in de Lasala in the passage he had cited. It may be that he was at pains to stress the disadvantages of the appellate route. Whatever he may have meant, it seems to me that although Lord Diplock’s dictum is not to be treated as if it were a statute, nevertheless if it is to be applied without doing unacceptable violence to his language, the expression “fresh action” simply cannot embrace an application in proceedings already instituted.”(emphasis added).

41.Nazareth JA (as he then was), stated on p.381 and 382 of Lui Sik-kuen that he agreed there being certain procedural advantages for a judge to set aside an order improperly obtained and then go on to make an appropriate order in lieu in the same proceedings. However, he considered such procedural option was not available. He called for the introduction of such option by statutory provisions. However, no new provisions to that effect can be identified to this Court at the present hearing, nor have counsel from both sides sought to rely on any statutory provisions which can achieve that one-stop disposal.

42.At one time at the hearing, question has been raised as to whether Rule 55 of the Matrimonial Causes Rules (“MCR”) made under the Matrimonial Causes Ordinance, Cap. 179 (“MCO”) is applicable. That rule provides for application for rehearing of a “cause” tried by a judge where no error of the court at the hearing is alleged shall be made to a judge. However, “cause” is defined under Rule 2 of the MCR to mean a matrimonial cause defined by section 2 of the MCA, which are only limited to proceedings for dissolution of marriage, nullity, judicial separation, etc., but not proceedings ancillary to the main suits. Similar discussion on the English counterpart of the Hong Kong provisions (r.2.42 of the Family Proceedings Rules 1991, r.54 of the Matrimonial Causes Rules 1977) was also found in T v T (Consent Order) [1996] 2 FLR 640 at 654G to 655E by Richard Anelay QC sitting as a deputy Judge of the English High Court. The conclusion therein supports that Rule 55 of the MCR is inapplicable: see T v T (supra) at 656 A-C citing Ward J in B-T v B-T (supra).

43.Lui Sik-kuen is a decision of the Court of Appeal which is binding on this Court and is squarely on the point. I prefer to follow Lui Sik-kuen in preference to Re. C which is an English single judge decision.  I am afraid the Wife’s setting aside summons would have to be struck out had she not sought to have it withdrawn.  

Fresh Action or Appeal?

de Lasala v de Lasala

44.The starting point is the Privy Council decision of de Lasala v de Lasala (supra) which is an appeal from Hong Kong. Lord Diplock stated at 561C:

“Where a party to an action seeks to challenge, on the ground that it was obtained by fraud or mistake, a judgment or order that finally disposes of the issues raised between the parties, the only ways of doing it that are open to him are by appeal from the judgment or order to a higher court or by bringing a fresh action to set it aside.”

45.The aforesaid has been cited with approval by other English authorities referred to by both counsel. Apart from applying to setting aside on ground of fraud or mistake, this dictum of Lord Diplock has been held to extend to setting aside in cases of material non-disclosure[7]. The question is which avenue being the most appropriate way to go about an application to set aside a consent order, or it does not really matter as both are equally appropriate.

Robinson (supra)

46.In Robinson, the wife appealed against ancillary relief orders made in the first instance court after trial on the ground of material non-disclosure, the English Court of Appeal allowed the appeal and set aside the order. In his judgment, Ormrod LJ particularly commented on the two ways of setting aside. He was of the view that for matters involving serious dispute of facts, taking out a fresh action is preferred:

“From the point of view of convenience, there is a lot to be said for proceedings of this kind taking place before a judge at first instance, because there will usually be serious and often difficult issues of fact to be determined before the power to set aside can be exercised. These can be determined more easily, as a rule, by a judge at first instance. Moreover, he can go on to make the appropriate order which we cannot do in this court [i.e. the English Court of Appeal]. I think that these proceedings should normally be started before a judge at first instance, although there may be special circumstances which make it better to proceed by way of appeal.” (p.114B)

Crozier v Crozier [1994] Fam 114

47.In Crozier, it is the husband who wished to appeal against a consent order made by the Registrar of the English County Court whereby he transferred his half interest in the matrimonial home to her wife. He originally intended the transfer of his said interest was in full and final settlement of all his maintenance liability including that to the child of the family. The Registrar inserted the words “save for child maintenance” before granting the consent. Later when the Wife was in financial difficulty, she applied and the husband was ordered to pay the child maintenance. That triggered off his appeal to set aside the order so that he could share the proceeds of sale of the property already sold. The appeal was transferred up and heard by a single judge of the Family Division of the High Court. Booth J took the view that she had jurisdiction and power to determine facts and make orders. She went on to consider the facts of the case and dismiss the husband’s appeal. Although it is not apparent from her judgment whether or not she heard oral evidence, what is clear from her judgment is that the facts relied on in the appeal were not in much dispute.

48.Before considering the merits of the appeal, Booth J expressed similar view as Ormrod LJ in that for cases involving factual dispute, the issue of a fresh proceeding is to be preferred. She had the following to say at 117G:

“In my judgment two principles can be drawn from these authorities. The first is that it is open to the party who seeks to set aside or vary a consent order to proceed either by way of appeal or to bring fresh proceedings. The second principle is that the procedure selected should be that which is the better suited for the determination of the issues involved. In cases where issues of fact will need to be resolved or the court will be asked to make substantive orders, then it will clearly be more convenient for the case be heard by a judge with the appropriate jurisdiction rather than by the Court of Appeal.”

B-T v B-T (Divorce: Procedure) [1990] 2 FDR

49.In B-T, the learned Ward J was then dealing with a situation that the wife was accused of material non-disclosure when a consent order embodying a compromise was made. The learned judge analyzed in detail the practice and procedure available to the English High Court and County Court. Although the then English rules are quite different from the current local provisions, and thus direct application is impossible, the principles highlighted therein provide useful guidelines on how the choice of fresh action and appeal can be made.

50.The learned judge had a discussion on many of the English authorities including, inter alia, the House of Lords decision in Fonesco v Beard [1930] AC 298, the Privy Council decision in Hip Hing Hong v Neotia & Co [1918] AC 888 and the Court of Appeal decision in Robinson (supra) which were all cited with approval by him. In particular he agreed with the sentiment expressed by Ormrod LJ in Robinson referred to in paragraph 46 above, except that he was troubled by the rather unsatisfactory procedure[8]. So despite the more complicated position in England than Hong Kong, it is obvious that Ward J supported the proposition that the setting aside should normally be started before a judge at first instance, although he agreed that there might be special circumstances which make it better to proceed by way of appeal. 

51.When Ward J was discussing one of the County Court Rules empowering the court to order rehearing in the same court when no error of the court at the hearing is alleged, after surveying a number of authorities he was of the views that the court of appeal would prefer there should be a trial of the real issues between the parties before permitting an appeal it. It makes good sense because it is important to prevent the court of appeal being flooded by having to hear cases in the first instance. He referred to authority[9] stating that it was held to be bad practice to encourage parties to come to the Court of Appeal without having the cause tried by the court below, though the existence of the jurisdiction of the trial judge did not negative the co-existence of the court of appeal’s jurisdiction[10].  

The Guidelines

52.So in my judgment, the guidelines that can be derived from the above authorities are these:

i)  Setting aside of a consent order which finally disposes of a financial claim on the grounds of fraud, misrepresentation or material non-disclosure by way of re-hearing before the same judge has been ruled out by a local Court of Appeal decision.

ii)  The only ways of launching the challenge are either by lodging an appeal to the Court of Appeal or issue of a fresh action in a first instance court.

iii)  If the evidence is so over-whelming one way or the other, the matter can be proceeded with by way of an appeal relying on affirmation evidence. Presumably the evidence is strong enough to dispose of both the leave to appeal application and the substantive appeal. If the appeal is successful, the question of ancillary relief can be restored in the same matrimonial suit for further determination.

iv)  If there is serious dispute of facts, the appropriate way to go about the setting aside is by issue of a fresh action in a court of competent jurisdiction so that the particulars of fraud and misrepresentation can be exactly pleaded, defined and identified, the issues fought out, evidence tested and the facts established by the court.

v)  If the consent order was set aside the aggrieved party can restore an ancillary application in the matrimonial proceedings.

53.I do understand that the aforesaid procedure may appear cumbersome. However, it is the most workable one that can be devised given the present constraint of our rules.

54.Miss Chan submitted that the only ways to issue proceedings in the Family Court are either by presentation of a petition or issue of an originating summons, but not a writ. That adds a further ground for her to elect the appellate route. However, it has to be remembered that the Family Court is only part of the District Court and is not of itself a creature of statute. A Judge in the Family Court is a District Judge designated to hear matrimonial and family cases. They still retain the full powers and authorities to dispose of matters falling within the District Court Ordinance and other empowering statutes. I consider that any action issued in the District Court by writ in its Civil Jurisdiction for setting aside can be competently disposed of by any District Judge. In any event, if it is considered that it may be more appropriate for the matter to be transferred to the Family Court, I fail to see why Family Judges sitting therein cannot deal with it simply because the matter is originated by writ and not by petition or originating summons.

55.Furthermore, the aforesaid procedure will save the Court of Appeal of the cumbersome work of resolving primary factual dispute for the purpose of disposing of the setting aside application. In my judgment it is doubtful whether it is right as a matter of principle for the Court of Appeal to direct a lower court to make finding of facts enabling it to dispose of an appeal as submitted by Miss Chan. In any event such direction by the appeal court will be very rare and exceptional.

Application of the Above Principles

56.From the available affirmation evidence:

i)  the Husband admitted he has not disclosed a Form E or any financial statements to that effect. However, his reply, in a nutshell, is that the Wife should be aware of his financial position. Further, he alleged all his bank statements, stock trading statements, Government rates and rents notices in respect of landed properties owned by him were sent to the matrimonial home. The Wife has the habit of opening and reading them. In addition, her brother was and is a director of two of his logistic companies. The Wife also attended opening ceremony of his new offices after they were acquired. Although she may not have an exact value of his total assets, it is his case that she should have been aware of the extent of his properties. It is also the Husband’s affirmation evidence that it is the Wife who has expressly stated that she did not wish to exercise her right to ask for full disclosure of his financial means and list of assets because she wanted to exit the marriage as soon as possible. He has neither exploited his position nor misled the Wife as alleged. There is also no deliberate non-disclosure as alleged;

ii)  the Wife alleged misrepresentation. However, in some part of her evidence, particularly when she talked about the signing of documents on 16^th December 2010, she appeared to suggest that there was no explanation on the part of the solicitor rather than there had been explanation which was misleading. Her case needs be more specific before one can form a view on what exactly happened on that occasion which she alleged to support her allegation of misrepresentation;

iii)  evidence suggests that in the course of the negotiation, the Wife has in fact requested change of the agreement to include better terms, e.g. to include renovation and furniture expenses and a life insurance policy in her favour. The Husband agreed. It shows, he said, that the Wife is not as simple and confused as alleged. She knew what was going on and how to protect her rights;

iv)  although the Wife said the documents were in English despite her request to have them written in Chinese, evidence shows that she has been provided with a letter in Chinese setting out terms almost identical to the consent summons, and she did sign on it;

v)  the Wife complained that although she agrees to allow the Husband to raise the purchase price for acquiring the property by way of mortgage on the property, she has never agreed to be liable for such debts if the Husband defaults. However, it appears her liability to the bank is a natural consequence of her consent to allow the mortgage to be created. It boils down to whether she understood the legal consequence when she gave her consent. She appeared to acknowledge in writing that she did[11]. Her concern appears to have been addressed by a life insurance policy requested by her;

vi)  the modification of the agreed terms in the consent summons is mainly to reflect the statutory requirement, to improve drafting and to remove ambiguity;

vii)  if there is non-compliance of the order, the proper way is to apply for enforcement and not setting aside; and

viii)  Mr. Lau, the solicitor acting for the Husband denied the allegations as alleged. According to Mr Lau, he has repeatedly asked the Wife to seek independent legal advice. It is the Wife who intended to get out of the unhappy marriage as soon as possible, and this should not, according to the Husband, be a good ground to back out, when the Wife subsequently found that it may be a bad bargain. He denied all the allegations against him as alleged by the Wife.

57.I accept very often documents were created for future litigation window-dressing purposes. However, the Wife, who has expressed her consent in writing and in a language she understands, has the burden of proving the existence of the vitiating factors recognized in law at the time she gave her consent. Given the affirmation evidence now placed before this Court, without particularization of the Wife’s allegation of misrepresentation and cross-examination of witness, it would be quite impossible for this Court to decide one way or the other whether the Wife’s case can be substantiated. It also helps identify what exactly the alleged “fraud” is as it is a serious allegation.

58.I have once thought whether it is feasible, for the purpose of the leave to appeal hearing and the substantive appeal in the higher court, to give directions for the parties to make full discoveries and then resolving the factual dispute by directing witnesses to attend Court for cross-examination. By so doing the leave to appeal application can be salvaged. However, as I have stated in the preceding paragraphs, it appears that the Wife has not framed her cases clearly. Further, despite the apparent confusion of the English rules which are irrelevant to the local situation, it is very clear from these English authorities that the only determining factor for an appeal or issuing a fresh action is whether there is serious factual dispute. Accordingly I consider it more appropriate for a fresh action be started with particulars properly pleaded and issues defined. In any event I do not consider the Wife will suffer any prejudice by taking out a fresh action.

59.It has to be remembered that not every non-disclosure of a party entitles the other side to set aside an order made pursuant to their agreement. In the circumstances, I am afraid the present appellate route is unsuitable to resolve the present dispute. Applying the aforesaid principles the leave to appeal summons must be dismissed, and I dismiss it according.

Orders

60.I now make the following orders:

i)  Leave granted to the Wife to withdraw her setting aside summons of 8^th September 2011 (i.e. paragraph (3) of the leave to appeal summons dated 20^th January 2012); and

ii)  The Wife’s leave to appeal summons of 20^th January 2012, save and except paragraph (3) be dismissed.

61.I fail to see why costs should not follow the event. I therefore make an order nisi that the Wife do pay the Husband costs of the aforesaid two summonses, including all costs reserved, with certificate for counsel, such costs order nisi be made absolute if no application is made by any party to vary the same within 14 days. 

Mr. Bernard Man, instructed by Howell & Co, for the Petitioner (“Husband”)

Miss Dora Chan, instructed by Wongs, Solicitors, for the Respondent (“Wife”)

[1] See paragraph 7 of the Amended Petition dated 5^th November 2010

[2] See paragraph 18 of Miss Chan’s submission dated 1^st March 2012

[3] E.g. paragraph 16 of Miss Chan’s submission dated 1^st March 2012 and paragraph 3 od her submission dated6th March 2012

[4] See paragraphs 3 to 5 of her supplemental submission dated 6^th March 2012

[5] See B-T v B-T [1990] 2 FDR1 at 15DE

[6] See also B-T v B-T [1990] 2 FDR 1 at D-H

[7] Robinson (supra)

[8] See B-T v B-T [1990] 2 FLR 1 at 12G

[9] See B-T v B-T [1990] 2 FDR 1 at 22G

[10] See B-T v B-T [1990] 2 FDR 1 at 23C - H

[11] See the Chinese acknowledgment annexed to the consent summons filed on 13^th January 2011