Cwg v. Mh and Others

HCMP 2409/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2409 OF 2013

(ON AN INTENDED APPEAL FROM HCMP NO. 643 OF 2012)

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BETWEEN

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D E C I S I O N

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Hon Kwan JA (giving the decision of the Court):

1.This is an application of the 2^nd respondent for leave to appeal against the order of Deputy High Court Judge B Chu on 2 August 2013. The matter came before the judge in this way.

2.On 26 March 2013, the judge handed down a judgment of 215 pages after a trial of 45 days in an application of the applicant (“the wife”) for financial relief under the new Part IIA of the Matrimonial Proceedings and Property Ordinance, Cap 192 and made an order for financial relief for the wife and children (“the Main Order”).  The 1^st respondent (“the husband”) brought an appeal against the Main Order (CACV 80/2013).  The 2^nd respondent is the husband’s mother.  Among other things, the judge found that the husband was the beneficial owner of at least 50% of the shares in three offshore companies, rejecting the 2^nd respondent’s contention that she was the sole beneficial owner of all those companies.

3.The husband sought a stay of parts of the Main Order in respect of the payment of the arrears of maintenance pending suit/interim order and the payment of the lump sum, pending the determination of his appeal (“the Stay Application”).  The 2^nd respondent has also brought an appeal against the Main Order (CACV 83/2013) but has not sought a stay of any part of the Main Order pending her own appeal.  She wished however to be heard in the Stay Application, to “support” her son’s application.  This was opposed by the wife.

4.In a judgment handed down on 2 August 2013 (“Judgment”), the judge held that the 2^nd respondent was not an “interested party” in the Stay Application and there is no reason why she should be heard on the Stay Application (Judgment, §§15 to 27).  In any event, the judge held that she should not be allowed to be heard on the Stay Application until she has purged her contempt of court and complied fully with the discovery order made by Poon J on 10 August 2012 (“the Discovery Order”), applying the principles in Hadkinson v Hadkinson [1952] P 285 (Judgment, §§28, 44, 55 to 59).  Accordingly, the judge ordered that the 2^nd respondent be barred from being heard in the Stay Application until full compliance with the Discovery Order and that she should pay the wife’s costs in resisting her application, which was summarily assessed at $200,000 (“the Subject Order”).

5.The 2^nd respondent sought leave to appeal against the Subject Order.  Leave was refused by the judge on 12 September 2013.  Detailed reasons were given by the judge in her ruling in refusing leave (“Ruling”), dealing with each of the eight grounds of appeal in the draft notice of appeal.

6.The 2^nd respondent renewed her application to this court for leave to appeal by issuing an application on 17 September 2013, advancing the same eight grounds in the draft notice of appeal considered by the judge with only minor changes.  We exercise our power under Order 59 rule 2A(5) of the Rules of the High Court to determine this application on paper without an oral hearing.

7.There are placed before us on the 2^nd respondent’s behalf a statement as to the background and proposed grounds of appeal (of 6 pages), a draft notice of appeal (of 13 pages) and submissions (of 10 pages).  In addition, her counsel, Mr C Y Li, SC, in his submissions, adopts and relies on his submissions in the court below dated 28 June 2013 (of 6 pages), a document entitled “Reply of R2 to App’s application to exclude R2 from the hearing of R1’s stay application” dated 12 July 2013[1] and excerpts from the transcript of the first and second days of the trial on 10 and 11 October 2012.  The 2^nd respondent’s solicitors lodged in court four bundles containing 1364 pages in all for the present application.

8.On behalf of the wife, submissions of 18 pages were lodged in opposition.

9.We do not consider the proliferation of submissions (a total of 35 pages on behalf of the husband[2]) and bundles a helpful way of presenting a case for granting leave to appeal.  Bearing in mind that the statutory requirement for granting leave is a reasonable prospect of success or some other reason in the interests of justice why the appeal should be heard, a meritorious case for granting leave should not normally require lengthy submissions, as full arguments should be developed in the hearing of the appeal.

10.Practice Direction 4.1 Part B para 15 provides that the skeleton arguments in an application for leave to appeal “should not normally exceed 5 pages on A4 paper in no smaller than 14 pt size”.  The Chief Judge of the High Court has written to the Chairman of the Bar Association on 10 August 2012 deploring the practice of lengthy submissions and bulky documentation for leave applications and stating that only skeleton submissions in compliance with the Practice Direction will be accepted.  Where, very exceptionally, circumstances warrant the lodging of a longer submission, a direction to that effect must first be obtained from the court below.  Even in that case, nothing longer than 10 pages will be accepted.  Parties and solicitors were reminded that documents lodged in court should be kept to a “bare minimum” and they “can be expected to be penalized in costs” if unnecessary documents were lodged.

11.Parties should take note of the above in future.  Submissions not in compliance with the clear requirements will be returned to them unread.  We will bear in mind the unnecessary documents lodged by the 2^nd respondent’s solicitors when we deal with costs at the end of this decision.

12.The principles on granting leave to appeal are well established.  Reasonable prospect of success involves the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable” (SMSE v KL [2009] 4 HKLRD 125 at §17).  And even if the threshold test of reasonable prospect of success is satisfied, the court still retains discretion whether to grant leave, although the fact there is, ex hypothesi, a reasonable prospect of success would heavily influence the court’s exercise of discretion (Ho Yuen Ki Winnie v Ho Hung Sun Stanley, HCA 391/2006, 25 May 2009, §§3 and 8).

13.We wish also to point out that the court may refuse leave to appeal in the interests of procedural economy and proportionality (Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 at §30).  Under Order 1A rule 2 of the Rules of the High Court, the court shall seek to give effect to the underlying objectives in Order 1A rule 1 in the exercise of its powers under the Rules or its inherent jurisdiction.  Among the underlying objectives are: “to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings” (rule 1(c)), and “to ensure that the resources of the Court are distributed fairly” (rule 1(f)).

14.The ten-page submission prepared by Mr Li for the purpose of the present application is practically the same as his written submission before the judge in the leave application dated 3 September 2013, save for the addition of two inconsequential paragraphs.  As virtually identical submission and grounds of appeal have been considered carefully by the judge, with whose reasons and conclusions (in the Judgment and the Ruling) we entirely agree, we do not propose to repeat them in this decision.

15.The judge is plainly right to hold that the 2^nd respondent is not an interested party for the purpose of the Stay Application.  She correctly exercised her discretion to refuse to allow the 2^nd respondent to be heard in the Stay Application.  The Stay Application, which has been adjourned three times, should proceed without further delay.  The parties to the Stay Application should not be diverted from having the real dispute adjudicated by a hopeless appeal of the 2^nd respondent.  As has been noted in the Judgment (at §20) and the Ruling (at §13), there is nothing to stop the 2^nd respondent from making an affirmation in support of the husband’s position in the Stay Application, to be filed on behalf of the husband.  There is also no objection by the wife to the husband relying on the affirmation of Ms Anita Lo that has been made on behalf of the 2^nd respondent in the Stay Application.  The 2^nd respondent has every opportunity to set out her position.  There is no unfairness to her.

16.Mr Li advanced the submission that the 2^nd respondent must be regarded as “exonerated and discharged” from all her obligations to comply with the Discovery Order as the affirmation she made to give discovery as required by the Discovery Order has been excluded as evidence at the trial of the financial relief, owing to the ruling of the judge on 11 October 2012 that she could not use her witness statement and affirmations as evidence in the trial without attending for cross-examination through video-link and she chose not to attend for cross-examination.  This submission has only to be stated to be rejected.  Her failure to comply with the Discovery Order had caused the court to be handicapped in the discharge of its inquisitorial function in the application for financial relief, and in the end the judge made findings by drawing adverse inferences.  It is absurd to argue she could take advantage of her own wrong in refusing to comply with a court order.

17.The judge is plainly right to find on the facts that the 2^nd respondent is clearly in contempt of court in failing to comply with the Discovery Order.  We do not think there is any basis to impugn the exercise of her discretion that a Hadkinson order should be made in the circumstances of this case.

18.There are no reasonable grounds of appeal.  Nor do we think there is any other reason in the interests of justice why the proposed appeal should be heard.  Even if there are arguable grounds, and we do not think there are, this is clearly a case the court would have exercised its discretion to refuse leave, in the interests of procedural economy and proportionality.

19.We dismiss the 2^nd respondent’s summons and make a further order pursuant to Order 59 rule 2A(8) that no party may under rule 2A(7) request the determination to be reconsidered at an oral hearing inter partes as the application is wholly without merit.

20.Costs of the application should follow the event.  This is an application that should never have been brought.  We also have regard to the fact that more than half of the papers in the bundles placed before us are wholly unnecessary.  We make an order nisi that the 2^nd respondent is to pay the wife’s costs of this application on an indemnity basis.  We are minded to give a certificate for two counsel only for the wife, notwithstanding taxation is to be on an indemnity basis.  Any party seeking to vary the order nisi shall lodge a written submission within seven days hereof, with leave to the other party to reply in writing seven days thereafter.

21.We do not propose to order taxation on a gross sum basis.  We note that the judge did not make a gross sum assessment when she dismissed the 2^nd respondent’s leave application.  As it may be necessary to ascertain the extent of overlap in the work done for the two leave applications, it would be more appropriate for the costs in the present application to be taxed in the ordinary way at the same time as the taxation of the costs for the earlier application.

Written submissions by Ms Audrey Eu SC, Mr Eric Leung and Mr Chan Hei Ching, instructed by C T Chan & Co, for the applicant (respondent)

Written submissions by Mr C Y Li SC and Mr Adrian But, instructed by B C Chow & Co, for the 2^nd respondent (applicant)

[1] This submission has not been provided to this court. We decline to call for it.

[2] Not including the unknown number of pages in the submission dated 12 July 2013 not provided to this court inadvertently.