ARAV v. VP, LJ also known as PJ

CACV 246/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 246 OF 2010

(ON APPEAL FROM FCMC NO. 3230 OF 2007)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Fok JA (giving the reasons of the Court):

1.  On 16 June 2011, this court handed down judgment dismissing the wife’s appeal against the judgment of Her Honour Judge Melloy in ancillary relief proceedings.

2.  By notice of application dated 14 July 2011, the wife sought leave to appeal to the Court of Final Appeal from the judgment of this court.

3.  At the conclusion of the hearing, we refused leave and dismissed the application with costs, indicating that we would hand down our reasons in due course.  These are our reasons.

4.  Leave was sought on the basis of section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, that grounds (1) to (9) in the notice of application raise questions of great general or public importance.

5.  It was also contended that leave should be granted on the “or otherwise” limb of section 22(1)(b) in respect of ground (10) in the notice of application, which states:

“(10) Further, the Court of Appeal ought to have found that at least one of the scenarios that the parties must have envisaged as being one where the separate financial arrangements agreed upon was applicable must have included the event of divorce. The separate financial arrangements agreed upon was applicable regardless of whether marriage continues or there is divorce. These are necessary and irresistible inferences from H.H. Judge Melloy’s Judgment and findings of fact”.

6.  The wife accepted that it is the usual practice of this court not normally to grant leave under circumstances such as those presently stated in ground (10) but, rather, to leave the matter to be pursued with the Appeal Committee if and insofar as may be necessary.  It is therefore not necessary for us to say any more about this ground.

7.  Grounds (1) to (9) of the notice of application raise the following questions:

“(1) Whether paragraph 170 (per Lord Mance) and/or paragraphs 150 to 153 (per Baroness Hale) in Miller v. Miller & McFarlane v. McFarlane [2006] 2 AC 618 correctly represents Hong Kong’s jurisprudence - and in particular:-

(a) “there can be marriages, long as well as short, where both partners are and remain financially active, and independently so. They may contribute to a house and joint expenses, but it does not necessarily follow that they are or regard themselves in other respects as engaged in a joint financial enterprise for all purposes. Intrusive inquiries into the other’s financial affairs might, during the marriage, be viewed as inconsistent with a proper respect for the other’s personal autonomy and development, and even more so if the other were to claim a share of any profit made from them. In such a case the wife might still have the particular additional burden of combining the bearing of and caring for children with work outside the home. If one partner (and it might, with increasing likelihood I hope, be the wife) were more successful financially than the other, and questions of needs and compensation had been addressed, one might ask why a court should impose at the end of their marriage, a sharing of all assets acquired during matrimony which the parties had never envisaged during matrimony. Once needs and compensation had been addressed, the misfortune of divorce would not of itself, as it seems to me, be justification for the court to disturb principles by which the parties had chosen to live their lives while married”;

(b) “I agree with what Baroness Hale of Richmond has said in para 153, which is, as I see it, also consistent with the last sentence of para 25 of Lord Nicholls of Birkenhead’s speech [which reads: “To this non-exhaustive list should be added, as a relevant matter, the way the parties organised their financial affairs”]”;

(c) “in a matrimonial regime which still starts with the premise of separate property, there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them”;

(d) “The nature and the source of the property and the way the couple have run their lives may be taken into account in deciding how it should be shared”;

(e) “Take, for example, a genuine dual career family where each party has worked throughout the marriage and certain assets have been pooled for the benefit of the family but others have not. …… We can assume that the family assets … should be divided equally …… But it might well be fair to leave undisturbed whatever additional surplus each has accumulated during his or her working life”;

(2) Whether before departing from equality for good reasons it is necessary to find and/or good reasons are dependent upon finding an agreement that has to be specifically made in express contemplation of divorce? Or per the Court of Appeal – “The question ... is simply whether … a relevant agreement to keep finances separate in the event the marriage should come to an end has been demonstrated” [Judgment at §92 p.26] or an actual “implied post-nuptial agreement” and/or for “in the event of a divorce” must be found [Judgment at §94 to §100];

(3) Or whether the true test is to be found in considering and taking into account inter alia the way the parties have organised their financial affairs, regarded themselves as engaged in a joint financial enterprise or not, for all purposes or only some purposes or not, respecting the parties’ individual autonomy and the parties’ envisagement of ‘sharing’ or ‘non-sharing’ as between the parties inter se, of specific assets, identified accounts or general properties overall, and whether or not and to what extent the Court should disturb the principles by which the parties had chosen to live their lives whilst married?

(4) Once needs and compensation have been addressed and subject to principles of fairness and reasonableness, the Applicant will contend that the abovementioned factors may constitute and amount to weighty and good reasons for departure from equality or ‘automatic sharing’. The Applicant will contend that it is unnecessary to show (or at least it is not fatal not to show) that there was an actual post-nuptial agreement in the sense of being made specifically in express contemplation of divorce; for example, where financial arrangements were envisaged without regard to marriage or divorce, or envisaged to be applicable whether they remain married or are divorce;

(5) Whether these principles are limited or restricted to ‘short marriages’ only, so that ‘long marriages’ will result in ‘automatic sharing’ regardless of the abovementioned factors?

(6) Whether it is the law that after a long marriage, the parties to the marriage become incapable of exercising individual autonomy so as to agree upon or envisage a financial arrangement that involves ‘non-sharing’ or other substantial departure from equality? And if so, whether this is because after a long marriage, any financial arrangement that involves ‘non-sharing’ or other substantial departure from equality is deemed to be automatically and irrefutably ‘unfair and unreasonable’?

(7) Whether principles of LKW v. DD and/or White v. White are grounded upon inter alia implementing the implied or assumed default intentions of the parties - namely, equal sharing; but that, where that implied or assumed default intention (equal sharing) is proven to be inapplicable or incorrect, then subject to fairness and reasonableness, the parties’ individual autonomy and freedom to choose and make agreements or envisagement should be respected and/or afforded appropriate weight, whether they be expressed, implied, inferred from words, writing or conduct;

(8) The Applicant will contend that where some other intentions or envisagement are found or to be inferred, then subject to fairness and reasonableness the Courts ought to take those factors into account and give proper weight, notwithstanding whether or not they amount to actual agreements specifically made in express contemplation of divorce;

(9) The Court of Appeal erred in finding that the agreement and separate financial arrangements of the parties was only applicable during marriage and became irrelevant in the event of divorce”.

8.  In my opinion, the grounds do not raise questions which ought to be submitted to the Court of Final Appeal for decision.

9.  First, this court took the view that the evidence did not support a finding of separate finances.  The assets in question were derived during the marriage and from the family businesses set up by the husband and run by the parties jointly.

10.  Secondly, it was common ground that this marriage was a long marriage and, in that context, the difference of opinion in Miller/MacFarlane between Baroness Hale and Lord Nicholls does not arise.

11.  Thirdly, this court found on the facts that there was no agreement to keep finances separate in the event the marriage should come to an end.  Moreover, the argument that there was an implied post-nuptial agreement was not one advanced before the Judge and would amount to a new case, in respect it could not be said that there was no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at trial.  On the basis of the principle in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356, it should not be permitted to be taken now.

12.  Fourthly, it appears to be accepted that the argument to depart from equality, taking into account the way the parties arranged their lives, arises only after needs have been provided for.  However, the Judge’s award, which we upheld, was arrived at on the basis of assessing the wife’s reasonable needs, generously interpreted (§118), and also the husband’s needs (§119) and there was no surplus remaining for sharing, either equally or otherwise.

13.  For these reasons, the questions of great general and public importance said to be raised do not arise on the facts.