Tcwf v. Lkks

Read the full judgment text of CACV 154/2012 on BabelCite. This Court of Appeal judgment was delivered on 10 June 2014 before Lam VP, Kwan JA, Barma JA.

Civil appeal – leave to appeal to the Court of Final Appeal – ancillary relief proceedings under the Matrimonial Property and Proceedings Ordinance (MPPO) – Framework Agreement and Special Articles conferring rights on the Husband's father (STL) to claw back assets in the Japanese business – referral of alleged criminality to the Director of Public Prosecutions – findings of forgery, conspiracy to pervert the course of justice and perjury – fighting fund – deduction of costs orders from needs award – Court of Final Appeal Rules (Cap 484 sub. leg. A) Rule 4(1). Whether the Father's proposed questions on the setting aside of the trial judge's referral to the DPP raise a question of great general or public importance – held no; an accomplished referral is not reversible on appeal, the questions were fact-specific or factually inaccurate, and a proposed new ground regarding legal professional privilege had not been raised at the main hearing and could be raised in related appeals (CACV 101 and 107 of 2013). Whether the Wife's 14 proposed questions of great general or public importance satisfy the leave threshold – held no; the questions were fact-sensitive, several were premised on a false characterisation that the Husband owned the Japanese business assets absolutely, and they sought to relitigate findings of fact rather than engage matters of general importance. Whether leave should be granted under the 'or otherwise' limb – held no exceptional reasons. Principles on appellate interference with primary findings of fact affirmed (Ting Kwok Keung v Tam Dick Yuen, Biogen Inc v Medeva plc, Piglowska v Piglowski). All notices of motion dismissed with costs, with a warning that the court will consider costs sanctions under Order 62 Rule 8 in future for overlong, argument-laden notices of motion contrary to the succinct requirement of Rule 4(1) of the Court of Final Appeal Rules.

Legal issues: Leave to appeal to the Court of Final Appeal - Father's application · Leave to appeal to the Court of Final Appeal - Wife's application

Outcome: All notices of motion for leave to appeal to the Court of Final Appeal dismissed with costs.

Cites 5 cases

Case No.CACV 154/2012
Court
Court of Appeal
Date10 Jun 2014
JudgeLam VP, Kwan JA, Barma JA
Case Document
100%Judiciary

CACV 154/2012 &
CACV 166/2012
(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS 154 and 166 OF 2012

(ON APPEAL FROM HCMC NO 5 OF 2008)

____________

BETWEEN

  TCWF Petitioner
  and
  LKKS Respondent
  and
  STL 2nd Intervener
  OIL 3rd Intervener

____________

Before : Hon Lam VP, Kwan and Barma JJA in Court
Date of Hearing and Judgment: 6 June 2014
Date of Reasons for Judgment : 10 June 2014

___________________________

REASONS FOR JUDGMENT

___________________________

Hon LamVP (giving the Reasons for Judgment of the Court):

1.There are two sets of applications for leave to appeal to the Court of Final Appeal in respect of our judgment of 10 January 2014: the first in time are the Notices of Motion taken out on behalf of STL [“the Father”] on 30 January 2014 (one Notice in respect of CACV 154 of 2012 and one Notice in respect of CACV 166 of 2012). The second set is the Notices of Motion taken out by TCWF [“the Wife”] on 7 February 2014. It is common ground that neither party is entitled to leave as of right. We dismissed all the Notices of Motion at the hearing on 6 June 2014. The following are our reasons.

2.Before we discuss the merits of the applications, we wish to reiterate respectfully what has recently been said by Cheung JA in another application for leave to appeal to the Court of Final Appeal.  In MKKWH v RKSH CACV 197 of 2012, 26 March 2014, His Lordship said at para 15:

“Both parties have loaded their notices of motion with unnecessary details and arguments. Practitioners are reminded of the requirement contained in Rule 4(1) of the Court of Final Appeal Rules (Cap 484 sub. leg. A), namely, that the Notice of Motion is to state all such facts and matters as may be necessary for the leave application ‘succinctly’ and ‘to deal with the merits of the case only so far as is necessary to explain the grounds upon which leave to appeal is sought.’ Given that a judgment of this Court is already in existence and written submissions will be lodged in support of the application for leave, our view is that the notice of motion should contain no more than a succinct statement, if leave is sought on the ‘as of right’ ground, why the threshold is engaged and if the application is based on the discretionary ground, a properly framed question or questions on the great general or public importance point or a succinct statement why the ‘or otherwise ground’ is engaged. This will enable the parties to focus on the real issues to be determined on the leave application.” (our emphasis)

3.In the present case, the draft Amended Notices of Motion of the Father are documents of 12 pages each consisting of 21 paragraphs, with the formulated questions set out within one page and the rest of the document consisting of 2 pages of background and 6 pages of arguments. Worse still, the Notices of Motion of the Wife are two documents of 33 pages, consisting mostly of arguments.  The formulation of the questions, as shall be apparent below, is not conducive to the distillation of the real questions to be considered in the proposed appeal. 

Applications by the Father

4.The applications for leave to appeal by the Father focused on our refusal to set aside the referral of the case by Saunders J to the Director of Public Prosecution. Our reasons can be found at paras 115 to 125 of our judgment of 10 January 2014.

5.In the two Notices of Motion of the Father, identical questions were formulated:

“1. Can the CA review the decision of a first instant judge to refer a matter to the DPP for the DPP to investigate alleged criminality disclosed in the evidence in the case before him?

2. Does a judge have an unfettered right to make a referral to the DPP or are there principles, which guide the exercise of his discretion, and if so, what are they?

3. Did Saunders J have power to refer the alleged conduct of STL and the Husband to the DPP in his judgment handed down on 1 December 2011, having regard to (1) he had exercised his discretion against referral in February 2011 and (2) the decision of the CA that any further investigation of the alleged criminality at the AR trial (which took place in October and November 2011) was illegitimate, and the documents which were alleged to substantiate that criminality were unproved and inadmissible?”

6.The Father applied for leave to amend his Notices to add a fourth question:

“Should Saunders J have directed the Registrar of the High Court to forward a copy of his Judgment to the DPP when that judgment contained copious quotations from documents which were subject to legal professional privilege (“LPP”) as between STL and the DPP (as the CA decided in CACV 101 and 107 of 2013 …) thereby disclosing the privileged information and material contained in such LPP documents to the DPP?”

7.On question (1), for reasons we have set out in our judgment, we do not think it is reasonably arguable that an accomplished referral is reversible and as such appealable.  Once a referral had been made, it is a matter for the prosecuting authority.

8.On question (2), we do not think it calls for determination in the present case.  As we have said in our judgment, there is no doubt that it was open to judge to refer the matter to the Director of Public Prosecutions as part of the duty to uphold the rule of law.  This is particularly so bearing in mind that the allegations are in respect of perjury, forgery and conspiracy to pervert the course of justice in the course of proceedings before the judge. See also paras 5 to 8 of our judgment in CACV 101 and 107 of 2013.

9.Question (3) as formulated is clearly a fact specific question.  It does not raise any question of great general or public importance. Further, as submitted by the Wife (with her written submissions prepared by Mr Howard QC, though he was not able to appear at the oral hearing), it is factually incorrect to say that Saunders J had decided against referral in February 2011.  In any event, it follows from what we said in respect of Questions (1) and (2) that Question (3) cannot have any ultimate bearing on the matter.

10.The new question proposed to be added to the Notices of Motion has not been argued before us in the main appeal.  In such circumstances, we do not think we should grant leave for it to be raised at this late stage in the context of these applications.  Once the judgment has been supplied to the Director of Public Prosecutions without any condition, it is for him to decide what use he could make of it.  If the Father wishes to seek relief in terms of the use of LPP materials contained in the judgment, he would need to seek the necessary redress against the Director.  This should not be achieved by an appeal (in which the Director is not a party) on the new proposed ground.  If the release of the judgment to the Director has any bearing on the LPP question which the Court of Final Appeal shall consider in the other appeals (viz. those arising from CACV 101 and 107 of 2013), the Father may consider seeking leave from the Court of Final Appeal to permit him to raise it in the context of that appeal.  That will be a matter for the Appeal Committee of the Court of Final Appeal.  

11.Nor do we see any basis for granting leave to the Father under the “or otherwise” limb in the context of these applications.

Applications by the Wife

12.Turning now to the Wife’s applications, 14 “questions” were formulated as questions of great general or public importance in her Notices of Motion, with most of them actually consisting of a series of questions.

13.The 1st proposed “question” is formulated as follows:

“(i) Is a spouse entitled to structure his or her financial arrangements with a third party on the basis of an agreement with that third party that assets owned legally and beneficially by the spouse will be transferred to a third party in the event of divorce consensually and without opposition from the spouse?

(ii) Is that agreement to be treated as akin to a nuptial agreement between and binding on, the parties to the marriage even where one spouse (i.e. the non-signing spouse) has not consented to the arrangement?

(iii) If such agreements may be recognised, what limits should be imposed on their recognition and/or what factors should the court take into account in determining whether to hold parties to the marriage to the agreement?

(iv) Does this species of agreement, specifically designed to put assets beyond the jurisdiction of the court, purport to oust the Court's jurisdiction under the MPPO and hence is contrary to public policy?

(v) In any event, are such agreements inherently unfair?”

14.These can be considered together with the 2nd proposed question:

“Is property which is legally and beneficially owned by a party or parties to the marriage (and confirmed, by operation of a s.17 MPPO/counterclaim order, to be available to the parties until satisfaction of the ancillary relief claim by payment of the award in full), but which is encumbered by contingent third party rights, prima facie available for division between spouses (such that consideration of the extent to and circumstances in which the third party may exercise his rights at a future date becomes a factor that is part of the discretionary exercise under s.7 MPPO) or does the existence of a contingent third party right alone mean that the encumbered property is not property to which a party to the marriage is entitled “in possession or reversion”?”

15.A fundamental premise of these questions is that the property in question, namely the Husband’s interest in the Japanese business, was owned by him absolutely.  As explained in our substantive judgment, this is a wrong premise.  There is no dispute that the initial funds for the acquisition of the underlying assets in the business came from the Father.  And the arrangement between the Father and the Husband from which the rights of the Father stemmed had been in place from the very beginning.  These questions challenged our conclusion that by virtue of his rights under the Framework Agreement and the Special Articles, the Father was entitled to exercise his power to claw back the assets from the Husband in light of the divorce and this must be taken into account in working out the financial resource available to the Husband.  It was also our conclusion on the evidence that the Father is likely to exercise those rights.

16.At para 202 of our judgment, we said,

“... The future rights of the father, if they are real and likely to be exercised in the foreseeable future, must have a bearing on whether and the extent to which the value of the Japanese business could be regarded as the assets or financial resources of the husband to be taken into account under s7(1)(a) of the MPPO. First, the father’s rights must be determined as a matter of strict legal rights according to the general law. Then, secondly, the likelihood of such rights being exercise by the father must be determined as a fact-sensitive question in accordance with the approach in KEWS …”

17.Further, that was decided against the background that the Wife did not impugn the validity of the Framework Agreement and the Special Articles, see paras 131 and 132 of our judgment.  And as we said at para 265 of the judgment, the Wife had full knowledge of the Father’s control over the business and when she worked for the business, she did not labour under the misapprehension that the Father had given up his rights. 

18.In coming to our conclusions in this respect, we only applied well established principles to the facts of this case to correct the error of law at para 204 of the judgment of Saunders J.  Up to now, we are not persuaded that it is reasonably arguable that the legal rights of the Father can be ignored simply because he chose to exercise it upon the divorce of the Husband and the Wife.  The crucial question is whether it was likely that the Father would exercise his legal rights and it is obviously a fact-sensitive question. 

19.As we emphasised at para 189, we confined our analysis to bona fide commercial arrangement supported by valuable consideration and we expressed no view on other arrangements of a domestic nature.  We also did not express any view on a scenario where assets originally belonging to a husband absolutely were transferred to a third party to set up a kind of pre-nuptial ring fence against a wife’s potential matrimonial claims without the knowledge or acquiescence of his future wife. 

20.In our judgment, these questions do not arise on the facts of the present case.  Further, the answers to the questions as formulated must depend on the facts of the case and it is undesirable to consider them in the abstract when the facts of the present case do not provide a sound basis for that exercise.

21.Mr Howard recognised the distinction drawn by us at para 14 of his reply skeleton where he said a core question of the Wife's proposed appeal is whether the arrangement between the Husband and the Father is construed as a “bona fide commercial arrangement supported by valuable consideration” or whether it is to be construed as a nuptial protection device that should be subject to proper scrutiny by the Court.

22.We are not impressed by Mr Howard’s argument that the Husband and the Father did not finally complete their agreement until the marriage had broken down.  Our analysis of the rights of the Father was based on the Framework Agreement and the Special Articles which require no further agreement between the Father and the Husband after the marriage breakdown to become exercisable by the Father.

23.At para 11 of his reply skeleton, Mr Howard formulated a new question: whether a third party can legitimately enter into a nuptial agreement (in the sense of an agreement solely operating on divorce) intended to effectively deprive the Court of the jurisdiction to apportion assets between divorcing spouses.

24.On its face, it could be a question of great general or public importance.  However, the question again starts from a false premise: that the assets in question belonged absolutely to one of the spouses before the agreement is made.  As explained above, this is not the situation here. 

25.Turning next to the 3rd proposed “question”, formulated again as a series of questions in the Notices of Motion as follows:

“Where a court has, as a preliminary issue, decided that a transfer of assets by a spouse to a third party should be set aside under s.17(1)(b) of the MPPO, can the court go behind the s.17 order to later hold:

i. That the assets subject to the s.17 order do not form part of the matrimonial assets, notwithstanding the fact that s.17 requires the court to determine that, if the disposition were set aside, the applicant would get financial provision or different financial provision.

ii. That the agreement between the said spouse and third party to transfer the spouse’s assets to the third party involves a bona fide commercial transaction supported by valuable consideration notwithstanding the fact that this was a defence not relied upon in the s.17 proceedings and, by virtue of the grant of the s.17 order, impliedly rejected by the court?

iii. Should the Court of Appeal make a factual finding regarding the exercise of STL’s rights which not only reversed the finding of the trial judge but ran directly contrary to the admissions made by the Husband and STL to the Wife's Re-amended Defence and Counterclaim (in particular paragraph 35.1)? The Wife submits that the Court of Appeal’s decision to ignore the effect of the deemed admissions of the Husband and STL whilst simultaneously holding the Wife to her side of the compromise was illogical and resulted in unfairness to the Wife.”

26.Sub-paragraph (iii) shall be considered below together with the 4th Question.  On (i) and (ii), the effect of the compromise of the s.17 proceedings was considered by us under Sections C2 and C3 of our judgment.  As we have pinpointed at para 150:

“Neither the s 17 proceedings nor the conspiracy counterclaim impugned the father's rights under the Framework Agreement and the Special Articles. The nature and effect of the father's interest under those documents was not the subject matter of the dispute in these proceedings.”

27.We do not think Mr Howard’s attempt to construct some forensic arguments to extrapolate from the 2011 compromise a concession on the part of the Father that his rights under these instruments shall be sub-ordinated to the rights of the Wife in her claims for financial relief is reasonably arguable.

28.The 4th proposed question is formulated as one question:

“To what extent can (and should) the Court of Appeal interfere with the primary findings of fact made by the trial judge? The Court of Final Appeal is invited to give definitive guidance on the parameters in which an appellate tribunal should interfere with primary findings of fact and the circumstances in which it is permissible for the appellate tribunal to substitute its own findings rather than order a retrial.”

29.The circumstances under which this court will interfere with primary findings of fact are well established and Mr Howard did not suggest that we should depart from the principles laid down in Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD 1, Biogen Inc v Medeva plc [1997] RPC 1 and Piglowska v Piglowski [1999] 1 WLR 1360.  What he is really complaining about is this court’s application of those principles to the facts of this case.

30.We have explained in Section C5 why we needed to intervene in the Judge’s conclusions on the facts.  Mr Howard tried to show that we were wrong in that respect in terms of the 1st and 2nd questions discussed above.  For the reasons given above, we held that those grounds were insufficient to support leave to be granted.  If the validity of our premise to intervene with Judge’s conclusions in Section C5 cannot be challenged, we do not think there is any reasonably arguable discrete ground for suggesting that we were wrong in doing so.

31.Questions 5 to 11 were formulated as follows:

“The proposed 5th question is:-

‘i. Where documents have been disclosed by one spouse or a third party pursuant to orders for discovery, is the other spouse who wishes to rely on the documents required to strictly prove them?

ii. What are the wider implications of such a rule for the ability of a party to ancillary relief proceedings to rely on documents disclosed by another party which question that party's creditworthiness (whether or not involving a crime); for example, documents disclosed pursuant to the practice of exchange of questionnaires, documents attached to a party's Form E, or documents produced pursuant to an Anton Piller order?

iii. Does the Court of Appeal's requirement for strict proof of the documents by the non-adducing party hamper the inquisitorial function of the court?’

The proposed 6thquestion is:-

‘Does the collateral evidence rule prevent a party who is cross-examining on the issue of credit from relying on documents adduced by the person whose credit is being attacked? Moreover, does the collateral evidence rule operate in circumstances where the witness has chosen not to give any answer to the question put, in reliance on the privilege against self-incrimination, as opposed to denying the assertion?

Is it right that a party who supplies documents at an interlocutory stage of financial remedy proceedings, which incriminate him in relation to a possible crime, can prevent those documents being used against him on credit by claiming PSI? Does PSI apply to matrimonial proceedings at all and, if so, to what extent given what the English Court of Appeal has said in its disclosure judgment in the case of R v K [2010] QB 343?’

The proposed 7th question is:-

‘Whether the collateral evidence rule, as dealt with in Chapter [22] of Phipson on Evidence 18th Edition precludes:

i. The admissibility of documents previously disclosed by the other parties at the instance of the opposing party; and

ii. The adducing of such documents with a view to demonstrating lack of credit/bad character;

iii. The Wife commenting on such documents and exhibiting some of the same to one of her witness statements (as she did in this case);

OR

Whether such documents were properly admissible as to credit, a key issue in the ancillary relief proceedings.’

The proposed 8th question is:

‘Whether the ‘finality rule’, as dealt with at paragraph [12] of Phipson onEvidence (ibid), a term adopted by Li CJ in HKSAR v Wong Sau Ming(2003) 6HKCFAR 135 at paragraph [26], applies:

i. Where the witness whose credit is being impugned does not deny the allegation in cross-examination but, as here, claims PSI and declines to answer so that there is no contradiction of an ‘answer’;

ii. Inflexibly in non-matrimonial civil proceedings given paragraphs [12-14] of Phipson and HKSAR v Wong Sau Ming at paragraphs [23-27];

iii. At all in ancillary relief proceedings, given the trial judge's obligation to investigate matters which he considers relevant to the outcome;

iv. Where the witnesses committed forgery and/or perjury in an earlier part of the same proceedings given that fairness required that the evidence of such forgery/perjury was before the court so that in the interests of justice the court would be able to take a considered view of the credibility of those witnesses.’

The proposed 9th question is:

‘Depending on the answers to the issues raised above, were the Court of Appeal right to set aside the finding of forgery?

The proposed 10th question is:

Is it right that, on the basis of a compromise to a s.17 application where the applicant obtained full relief on the basis of a ‘non-admission’ of forgery, the applicant is precluded from relying on conduct amounting to forgery/conspiracy at the ancillary relief trial when s.7 MPPO conduct was not an issue that required determination for the purpose of the s.17 application?

i. Is the effect of the Court of Appeal’s decision that an applicant is required to ask the court, at an interlocutory stage, to make findings on each and every issue that could conceivably fall within the definition of s.7 MPPO conduct or risk being estopped from raising a conduct case at trial? What are the repercussions and implications in respect of the court’s obligation to case manage in a way that is proportionate to the issues in the case at each stage of the proceedings?

ii. Whether, when an allegation is made at an interlocutory stage of financial provision proceedings which is clearly relevant to the credit of a party and/or a witness at the future final hearing of those proceedings, and that allegation is not admitted in an interlocutory consent order, the party making the allegation is disentitled from pursuing it at final hearing however relevant it might be on account of (a) res judicata; or (b) abuse of process; or (c) as a result of the earlier consent order.’

The proposed 11th Question is:

‘What is the true scope of the inquisitorial function of the trial judge in ancillary relief proceedings given that:

i. The trial judge, supported by the Court of Appeal, never considered the alleged conduct of the Husband in breach of the statutory duty under s.7 MPPO;

ii. The Court of Appeal have found that the trial judge was wrong to admit into evidence/rely on bundle SPl which was predominantly disclosed by STL at an interlocutory stage of the ancillary relief proceedings pursuant to an order of the trial judge ["The Cox and Railton Order"] dated 20.12.2010 and 6.1.2011;

iii. The Cox and Railton Order was made because the trial judge found that the fraud exception applied and therefore the documents were plainly relevant to the credit of the Husband and STL;

iv. The Court of Appeal have criticised the trial judge for relying on the same documents at the final hearing on the issue of the credit of the Husband and STL (at which hearing credit was relevant and in issue);

v. There is clear and compelling authority that the quasi-inquisitorial role of the trial judge in ancillary relief proceedings obliges him to investigate issues which he considers relevant to achieving a fair outcome even if not advanced by either party.  This strongly suggests that the trial judge could have called for the production of SPl (which the trial judge had already seen at an earlier stage of the proceedings) even if the Wife had not specifically filed it: See Parra v Parra [2003] 1 FLR 942 at para. [22] cited with approval by Ribiero PJ in LKW v DD [2010] 13 HKCFAR 537 at para. [69], Lykiardopulo v Lykiardopulo [2011] 1 FLR 1427 at paras. [36(i) and (ii)] and Prest v Prest [2013] 2 AC 415 paras [45] (in the speech of Lord Sumption) and [85] (Baroness Hale).’ ”

32.Again, most of these were formulated as a series of questions.  Further, they are loaded with submissions.  As highlighted by the 9th question, the purpose of these series of questions is to challenge this court’s decision to set aside the findings of Saunders J on forgery, or perhaps more accurately, the findings on the forgery of the 2006 CLA, the conspiracy to pervert the course of justice and perjury on the part of both the Husband and the Father in the affidavits that they have filed.  We came to that conclusion on two principal bases:

(a) The Judge should not have allowed these issues to be canvassed in view of the February 2011 compromise; and

(b) The relevant evidence had not been properly adduced before the court at the main trial.

33.Questions (5) to (8) and (11) related to (b) whilst question (10) related to (a).  

34.We must not lose sight of the primary issue in the ancillary relief proceedings: what financial relief the Wife should get upon divorce.  The Judge held that the allegations of forgery, conspiracy and perjury were not open to the Wife in terms of the assessment of conduct under the MPPO.  We agreed with him.  We only disagreed with the Judge on his ruling that these allegations could be raised in the context of credibility.  

35.In any event, it is difficult to see how the allegations of forgery, conspiracy and perjury, revolving around the 2006 CLA (which had been set aside under the terms of the 2011 compromise), could constitute relevant conduct under the MPPO when they are considered against our analysis of the financial resources of the Husband and the rights of the Father.

36.As far as the investigation into these allegations by the Director of Public Prosecutions is concerned, as explained in our substantive judgment, he is obliged to conduct independent investigation despite Saunders J’s findings (on the civil standard) being set aside by us.

37.It is also plain that the answers to these proposed questions in the present case depend very much on the rather unusual facts of this case.  The manner in which these questions were formulated underlines the lack of great general or public importance in the questions raised in the unusual factual context of this case.

38.We do not think the Wife has satisfied the threshold for granting leave in respect of these questions. 

39.The proposed 12th question is:

“Where a trial judge has made a finding of fact that there is a risk that a party would face the cost of defending future litigation brought against her by a third party (the cost of which could easily consume the entirety of a needs award), is it inconsistent with the purpose and quantification of a needs award to require that party to pay for any such future litigation out of their needs award instead of either (a) quantifying the likely cost of the litigation and including that cost within the assessment of needs; or (b) providing the party with a separate fighting fund; or (c) ordering that the provision of the fighting fund (e.g. payment of an additional lump sum) be triggered on the event of litigation being brought as envisaged. Is it inherently unfair to require a party to apply assets intended to meet their needs (and, in many cases, the needs of dependant children) to fighting future litigation?

Alternatively, if the Wife's appeal to the CFA is successful, is it inherently unfair to require a party to apply their sharing award to fighting future litigation and/or satisfying any successful claim in such litigation (in this case brought by her former father-in-law)?”

40.This proposed ground focused on our decision on fighting funds, discussed at Section D14 of our judgment.  It should be apparent from a careful reading of our judgment that we rested our decision on the factual circumstances of this case where the fighting fund is sought in respect of potential future litigation with STL (instead of the Husband) and the nature and merits of such litigation are unknown.  With respect to Mr Howard, the Wife’s contention that a fighting fund should be ordered in such circumstances is plainly unarguable though it is now being formulated as a general proposition. The short answer is that such discretionary power must be exercised in light of the circumstances of the case and the general proposition advanced in the proposed question does not take the matter further. 

41.The proposed 13th question is:

“Is it wrong in principle and contrary to public policy to reduce a needs award by the value of earlier costs orders made in favour of the recipient of the award? Specifically, does the fact that a needs award will now necessarily be reduced in the amount of an earlier costs order not run directly contrary to the key objectives of costs orders, namely to deter unmerited or oppressive litigation from being brought and to penalise a party for litigation conduct? Is the normal practice of making a needs award and then deciding whether a spouse should receive a costs award in addition now inappropriate? In which case, any application for costs after a needs award is superfluous.”

42.The reasons for our deduction of $30 million on account of costs orders made in her favour were set out at Section D12 of our judgment.  As explained, such deduction was necessary to avoid double recovery on the part of the Wife.  The costs in question were not the costs of the main ancillary relief hearing.  The proposed question completely distorted our decision and as such does not arise.

43.The 14th question is:

“In circumstances where the court has found that the Husband and the Wife both contributed equally to the running of a business - a business that was started with seed corn capital from a third party relative but the value of which far outstripped the initial gift by the date of separation - is the Wife entitled to share equally in the business assets (and in any event the value of the growth of the business during the marriage)?”

44.Again this proposed question distorts our decision.  It was premised on a characterization of the capital provided by STL to the business as an “initial gift” and the characterization of the business as one in which the Husband had absolute ownership.  We did not proceed on any of these premises.  Therefore the question does not arise from our decision. 

45.For these reasons, the Wife has not put forward any reasonably arguable question of great general or public importance.  Nor do we accept there are any exceptional reasons which warrant leave being granted to her on the “or otherwise” limb.  The size of the reduction of the award, our interference with the findings by the Judge, the setting aside of the findings on forgery, conspiracy and perjury are not, whether individually or collectively, sufficient reasons to call for leave to be granted.

Results

46.We therefore dismissed all the Notices of Motion before us with costs.

47.It is apparent from what we said above that we do not find the Notices of Motion helpful, particularly in respect of the formulation of the questions in the Wife’s Notices.  We expect the legal profession to pay heed to what has now been said by this court on more than one occasion as regards the contents of notice of motion seeking leave to appeal to the Court of Final Appeal generally and how questions should be formulated.  In the future, this court will consider the imposition of costs sanctions in similar situations, including sanctions under Order 62 Rule 8.

(M H Lam)
Vice President
(Susan Kwan)
Justice of Appeal
(Aarif Barma)
Justice of Appeal

The Petitioner appeared in person

Mr Martin Pointer, QC, and Mr Jeremy S K Chan, instructed by Stevenson, Wong & Co, for the Respondent

Mr Richard Todd, QC, Mr Peter Duncan, SC, Mr Norman Nip and Mr Derek Chan, instructed by Stephenson Harwood, for the 2nd & 3rd Interveners