ASHA HARKISHIN PREMISINGH v. HARKISHIN ISARSINGH PREMSINGH KISHINANI

CACV 845/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 845 OF 2000

(ON APPEAL FROM FCMC NO. 10800 OF 1999)

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REASONS FOR JUDGMENT

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Hon Le Pichon JA:

1. This is an appeal and cross-appeal from the ruling of Deputy District Judge Chainrai arising from an application by the petitioner (the wife) for maintenance pending suit. At the hearing, the appeal was dismissed and the cross-appeal allowed for reasons to be reduced into writing which we now do.

Background facts

2. The parties were married in 1981 in Bombay. The husband is a British citizen of Indian ancestry. The wife is also of Indian ancestry but an Indian national. Prior to their marriage and pending the husband's divorce from his first wife, the parties had lived together for about three years, mainly in Nairobi but also in Hong Kong. After their marriage in Bombay in 1981, they relocated to Hong Kong where the husband had a trading company, I Premsingh & Sons (Hong Kong) Limited ("the company") which was incorporated in 1976. There is no evidence that the husband had any other business, whether in Hong Kong or elsewhere. The wife also became a director and a shareholder of the company. In 1985, the company purchased its office premises in Wellington Street. The husband is a Hong Kong permanent resident and the holder of a permanent Hong Kong identity card, whilst the wife is the holder of a non-resident Hong Kong identity card.

3. Several months after arriving in Hong Kong in October 1981, the husband purchased a flat in Hankow Centre for just under $1,500,000 which was registered in his sole name. This became the parties' matrimonial home in Hong Kong. Unbeknown to the wife, the flat was sold by the husband in December 1998 to a BVI company for $2,000,000 with a leaseback arrangement for three years.

4. The husband is some 19 years older than the wife. He was 53 when he married the wife in 1981. He has grown up children from his previous marriage but there are no children of this marriage. The husband is now about 73 years of age.

5. Apart from Hong Kong, the parties also maintained a home in Bombay although the husband was a non-resident Indian for tax purposes. The flat in Bombay used to belong to the husband's father but passed to him upon the father's death. It is apparent from the evidence filed by the parties that they maintained homes in both Hong Kong and Bombay and travelled extensively and, according to the wife, normally in first class. They enjoyed a good lifestyle and a high standard of living.

6. The wife filed a petition in Hong Kong on 6 November 1999 ("the wife's petition") for divorce based on the husband's unreasonable behaviour. The events leading up to the filing of this petition can be stated shortly. On 5 August 1999, when the parties were in Bombay, the wife was served with an eviction notice which sought to evict her from the matrimonial home there. At the same time, she was made aware of a police complaint lodged by the husband against her, accusing her of misappropriating jewellery of considerable value kept in a safe deposit box in the Kowloon Hotel branch of HSBC in Hong Kong. A complaint had apparently also been made to the police in Hong Kong on 10 July 1999.

7. Since 1977 when she began living with the husband, the wife has been entirely dependent on him financially. Following service of the eviction proceedings, the husband cut off all financial support. According to the wife, she left India on 2 November 1999 because of harassment by the husband. Her petition was issued on 6 November 1999 and a notice of application for maintenance pending suit was filed two days later on 8 November 1999.

8. It is relevant to mention that on 29 September 1999, the husband took out divorce proceedings in Mumbai (Bombay) ("the husband's petition" or "the Indian proceedings"). However, there is no evidence that he ever attempted to serve the Indian proceedings on the wife prior to her departure from the matrimonial home in Bombay on 2 November to return to Hong Kong. Although Mr Clough, counsel for the husband, suggested that the wife had been evading service, the allegations as to the evasion of service had, until this hearing, centred on events that occurred in Hong Kong in about February 2000 and not whilst the wife was living in Bombay. It defies belief that she could have evaded service between 29 September and 2 November bearing in mind that she was living in the matrimonial home in Bombay and there had been no difficulty in serving her with the eviction notice on 5 August. I am therefore unable to accept the suggestion now being made that the husband's petition was not served earlier because of the wife's evasion of service. In fact, no explanation of any kind has been proffered regarding the delay on the husband's part in serving his petition on the wife.

9. After these proceedings had commenced, the wife discovered that the matrimonial home in Hong Kong had been sold by the husband in December 1998 to a BVI company by the name of Ipson Properties Limited for $2,000,000 and immediately leased back to the husband for three years for a total rental of $700,000. As noted above, the property was acquired in 1981 by the husband for approximately $1,500,000. Given these bare facts, it is perhaps not surprising that, on 24 January 2000, the wife took out a summons to set aside the disposition by the husband of the matrimonial home in Hong Kong.

10. At the hearing before the deputy district judge on 25 and 26 of February 2000, there were three applications, namely:

(1) the wife's application for maintenance pending suit;

(2) the husband's summons dated 22 February 2000 for a stay of the wife's petition and proceedings arising therefrom;

(3) the wife's summons dated 23 February 2000 for an order that the husband be restrained from proceeding with the divorce proceedings in India,

it having been agreed between the parties that the wife's summons relating to the disposition of the Hong Kong matrimonial home be adjourned for the filing of evidence and for argument.

11. The deputy district judge dealt first with the husband's application to stay the wife's petition. She applied the principles formulated in the Adhiguna Meranti [1987] HKLR 904 subsequently restated by the Hong Kong Court of Appeal in Louvet v Louvet & Another [1990] 1 HKLR 670 and dismissed the husband's application for a stay of the wife's petition. As to the wife's application to restrain the husband from proceeding with the husband's petition, the deputy district judge accepted the husband's submission that the granting of such an injunction would be tantamount to the granting of a stay of the India proceedings and dismissed the wife's application for a restraining order. As to the wife's application for maintenance pending suit, she ordered that the sum of $21,000 per month be paid by the husband until further order.

12. The husband's application for leave to appeal out of time and a stay of execution of the order as well as all further proceedings in the action pending the determination of the appeal was dismissed by the deputy district judge on 7 July 2000 and on appeal to a single judge of the Court of Appeal, the husband's application was refused by Mayo VP on 28 July 2000. On 2 August 2000, the husband applied to the Court of Appeal for the same relief. The application was heard by Woo JA and Burrell J who, on 9 November 2000, not only allowed the husband leave to appeal out of time subject to certain conditions but also stayed the wife's petition pending, inter alia, the determination of this appeal. It is not entirely clear why the wife's petition was stayed when at the same time she was invited to appeal against the deputy district judge's refusal to restrain the husband from proceeding with the husband's petition.

The appeal

13. The husband's appeal focused on the deputy district judge's refusal to grant a stay of the wife's petition. The appeal against the amount ordered by the deputy district judge to be paid as maintenance pending suit was not pursued at the hearing of the appeal save that written submissions had been filed.

14. It is common ground that the applicable principles are those set out in the Adhiguna Meranti. Mr Clough referred to the summary of the three-stage process prescribed in that case set out in a slightly abbreviated form in The Lanka Muditha [1991] 1 HKLR 741 at 744 and cited in Hong Kong Civil Procedure 2001 at 11/1/10:

"(I) Is it shown that Hong Kong is not only not the natural and appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than Hong Kong ...

(II) If the answer to (I) is yes, will a trial at the other forum deprive the plaintiff of any legitimate personal or juridical advantages. The evidential burden her lies on the plaintiff.

(III) If the answer to (II) is yes, a court has to balance the advantages of (I) against the disadvantages of (II) ... Deprivation of one or more personal or juridical advantages will not necessarily be fatal to the applicant provided that the court is satisfied that notwithstanding such loss substantial justice will be done in the available appropriate forum ... Proof of this ... rests upon the applicant for the stay."

Mr Clough accepted that unless he discharges the burden of proof in stage I, it is unnecessary for the court to consider stages II and III.

15. Mr Clough submitted that because the Indian proceedings have progressed (which is hardly surprising given the stay of the wife's petition), the stage I test is satisfied. But the stage I test requires something more than the mere fact of initiating proceedings in some other jurisdiction. That fact of itself does not render the Hong Kong proceedings inappropriate. The burden is on the husband to show that Hong Kong is not the natural and appropriate forum for the trial. In the police complaint brought in Bombay against the wife which was signed by the husband, it was stated that:

"1. The [husband] is a business man of repute having large businesses in Hongkong and is otherwise well settled at life. The [husband] is a non-resident Indian presently residing at Hongkong and is also having his residence in Mumbai at the address mentioned in the title of the plaint. The [husband] is also a Managing Director of one M/s, I, Premising & Sons (HK) Ltd, which is a company incorporated in Hongkong.

2. ...

3. ... The [husband] states that pursuant to the said marriage of the [husband] with the [wife], they resided together in Hongkong for a period of about 17 years i.e. up to 1998 as husband and wife in their matrimonial home at Hongkong. ..."

That complaint is undated but must have preceded the order of the magistrate made on 21 August 1999. As noted above, the wife's petition was filed on 6 November 1999, only a matter of several weeks after the making of those statements. In those circumstances, the husband can hardly dispute the real and substantial connection the parties have with Hong Kong.

16. After the date of the deputy district judge's ruling, the husband filed further evidence. In the husband's affirmation of 12 June 2000 filed on 15 November 2000, he said this:

"... I am now aged 72 years. Save and except for what is stated in paragraph 8, I am not gainfully employed in any capacity due to reasons of old age and ill-health. I suffer from various ailments as particularised below in paragraph [3] and require regular medical check-ups, treatment and am no longer able to lead a normal life due to constant dizziness, weakness, etc. caused by my medical condition. I have been advised by my doctors to take a complete bed rest and for these reasons I have been unable to travel to Hong Kong for the purpose of these proceedings in the court below ..."

17. He then set out his medical history which can be summarised as follows. He suffered from an ischaemic heart disease and in 1987 underwent a coronary artery by-pass operation. In 1994, he suffered a stroke which required hospitalisation. In 1995, whilst in Hong Kong, he had a haemorrhagic attack and was again hospitalised. Since 1995, he has suffered from haemorrhagic episodes and constant hypertension. He went on to say:

"... at the beginning of January, 2000, medical examination revealed that I was suffering from hypertension and due to my pre-existing heart disease and previous stroke, I was advised to take complete and strict bed rest for a period of one month."

18. Notwithstanding the doctor's orders for a "complete and strict bed rest", the wife has adduced evidence in the form of the husband's frequent flyer programme statement from Indian Airlines which shows that he travelled from Bombay to Colombo on 21 January 2000 (less than three weeks after the 'order' for complete bed rest), returning on 31 January 2000. Moreover, it is clear from the evidence filed that the husband's stroke and heart ailments did not prevent the parties from travelling extensively between 1994 and 1997 to Malaysia, Dubai, Bombay, London, Gilbraltar and Spain and several times to some of these destinations. So far as his business in Hong Kong is concerned, whether or not it is being wound down or suffering losses, it has not closed down. The company owns the office premises and although that has been mortgaged to secure a loan in the autumn of 1998, no evidence has been filed to show that there is no equity remaining. As regards the matrimonial home in Hong Kong, despite the sale, the husband has retained a leasehold interest which does not come to an end until December 2001.

19. All that can be said from his further evidence is that the husband finds himself ill and in India and his business is running at a loss. Those matters are hardly sufficient to render Hong Kong not the natural and appropriate forum given the parties real and substantial connection with Hong Kong over many years.

20. In my judgment, the husband has failed to demonstrate that Hong Kong is not the natural and appropriate forum for the wife's petition and his application for a stay must be dismissed. I would add that where the applicant fails at stage 1, it is unnecessary to go into stages 2 and 3. The judge below unnecessarily went into stages 2 and 3 but that does not affect the outcome of the husband's application for a stay of the wife's petition.

The cross-appeal

21. The wife has brought a cross-appeal in respect of the deputy district judge's refusal to issue an order to restrain the husband from proceeding with his petition in India. Ms Irving who appeared for the wife drew attention to the fact that since the filing of the wife's petition, the parties have been living apart. It is the wife's intention to present a fresh petition based on the fact that the parties to the marriage have lived apart for a continuous period of at least two years immediately proceeding the presentation of the petition within section 11A(2)(d) of the Matrimonial Causes Ordinance, Cap. 179 i.e. the no fault divorce provision. The wife's petition which is before the court at present is based on the husband's unreasonable behaviour. At the time the wife's petition was presented, she was unable to invoke the no fault divorce provision. The husband's petition is founded upon the wife's alleged infidelity and cruelty, but the issues raised include the alleged theft of jewellery. The common objective of both the wife's petition and the husband's petition is the dissolution of the marriage between them. It is an objective that currently can only be achieved by the wife or the husband (as the case may be) proving the allegations contained in the relevant petition which are rigorously contested. Ms Irving considered that the stay imposed by the Court of Appeal on the wife's petition was an impediment to the issuance of the fresh petition. Arguably, the wife is free take out a fresh petition but I can understand the reluctance to take steps that might appear to flout the stay imposed.

22. Ms Irving, counsel for the wife, submitted that once the forum conveniens issue has been resolved, it would be contrary to the forum non conveniens principle to permit both sets of proceedings to continue. As both sets of proceeding would have a common objective, it would inevitably lead to a duplication of effort and costs, not to mention the emotional output involved in contested legal proceedings. It would thus be vexatious and oppressive and therefore unfair to the wife to have to continue to defend the husband's petition in India. Underlying that submission was the suggestion that if Hong Kong is found to be the natural forum to whose jurisdiction the parties are amenable, an injunction should be granted. Further, if a stay were not granted, the husband's petition could be used by the husband as a reason for opposing the fresh petition which the wife intends to issue once she is able to do so, grounded on the no fault divorce provision.

23. Ms Irving referred to Hemain v Hemain [1988] 2 FLR 388, a case where by a majority, the English Court of Appeal granted an injunction restraining the husband from proceeding with his petition in France pending the hearing of his application to stay the wife's English petition. Mr Clough relied on the observations of Scrutton LJ in Cohen v Rothfield [1919] 1 KB 410, at 414, 415, cited in the dissenting judgment of Balcombe LJ at 393G-H:

"Where the plaintiff in the foreign action is not plaintiff, but defendant, in the English action, the case against interference is even stronger, for the person to be stayed has not himself initiated two proceedings. He has initiated one, and has been compelled to appear in another over which he has, as defendant, no control.

While, therefore, there is jurisdiction to restrain a defendant from suing abroad, it is a jurisdiction very rarely exercised, and to be resorted to with great care and on ample evidence produced by the applicant that the action abroad is really vexatious and useless."

Mr Clough submitted that the wife has failed to discharge the burden of proving that the husband's petition was vexatious and useless.

24. The observations of Scrutton LJ in Cohen v Rothfield which Mr Clough relied on are uncontroversial. See the judgment of the Privy Council delivered by Lord Goff of Chieveley in Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871 at 892F considered by May LJ in Hemain v Hemain. The Société Aerospatiale case is particularly relevant to the matters under consideration. At pp. 891G-897A, Lord Goff considered the applicable principles, giving due consideration to the House of Lords' decision in Castanho v Brown & Root (UK) Ltd [1981] AC 557 and its subsequent decision in Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460. Several principles emerge. First, the fact that the courts of country X have concluded that country X was the natural forum, does not entitle it on that ground alone to restrain a party from proceeding in the foreign court. It would be inconsistent with comity. See per Lord Goff (at 895E-896G). Second, an injunction may be granted to restrain the pursuit of foreign proceedings on the grounds of vexation or oppression though it should not be regarded as the only ground. See per Lord Goff at 893E. Third, the notions of vexation and oppression are not to be restricted by definition. The proper approach was explained by Bowen LJ in McHenry v Lewis (1882) 22 Ch. D. 397, 408:

"I would much rather rest on the general principle that the court can and will interfere whenever there is vexation and oppression to prevent the administration of justice being perverted for an unjust end. I would rather do that than attempt to define what vexation and oppression mean; they must vary with the circumstances of each case."

25. It would follow from the application of those principles that the mere fact that I have reached the conclusion that Hong Kong is the natural forum for the wife's petition is not of itself sufficient to warrant the grant of an injunction to restrain the Indian proceedings. It is therefore necessary to see whether the wife has made out a case of vexation and/or oppression given the circumstances of this particular case.

26. In this connection, there are several features that merit closer examination. A peculiar feature of this case is that the alleged theft of jewellery, the subject matter of the police complaint that has been made against the wife by the husband in Mumbai, is also an issue raised in the husband's petition. Therefore the wife cannot simply defend the husband's petition without dealing with the issue of the alleged theft and at the same time defending the criminal proceedings. So far as the criminal proceedings are concerned, as noted above, a complaint had also been made to the Hong Kong police. The Commissioner of Police has, in a letter dated 25 May 2000, confirmed that the wife was released from police bail without being charged on 22 May 2000 "due to insufficient evidence". Whilst the Hong Kong police are not precluded from continuing the investigation should new evidence surface, it is now 18 months since that letter was written and there is no evidence to suggest that the investigation is ongoing. It has to be borne in mind that the scene of the alleged crime of theft of jewellery is Hong Kong. Plainly, the police in Hong Kong are best placed to conduct the necessary investigations. Now we have a situation where the Hong Kong police are no longer continuing the investigation but apparently the wife is wanted for questioning by the police in Mumbai in connection with the criminal complaint filed by the husband in relation to 'missing' jewellery, the value of which has inexplicably ranged between $1,740,000 and $5,000,000 on the evidence filed on behalf of the husband. Second, the evidence adduced by the husband in connection with the alleged theft calls for comment. Kishinchand Chugani, a friend of the parties and, it would appear, a close business associate of the husband, made an affirmation on 27 July 1999 to the effect that he was informed by the husband of the alleged theft on 10 July 1999 when Mr Chugani was in Cameroon. On 7 June 2000, he filed a supplemental affirmation to the effect that on 21 June 1999 he had accompanied the husband to the Kowloon Hotel branch of HSBC and the locker was prised open in his presence. Clearly both versions cannot be true. It is possible to discern an element of vexatiousness and oppression in the manner in which the husband's case is being conducted by the filing of both those affirmations in support of the husband's case in the Hong Kong proceedings. A third matter that is of significance is that if the restraining order is not granted, it would be open to the husband to use the husband's petition as a reason for opposing any fresh petition that the wife had intimated to the court she intends to issue once she is free to do so. In my judgment, these considerations constitute 'exceptional circumstances' that justify granting a restraining order against the husband.

27. It must unquestionably be in the parties' best interests to achieve a divorce through the no fault provision rather than bitterly contested proceedings. Where the common goal of the parties (i.e. the dissolution of the marriage) can be attained swiftly and without the unavoidable expense, aggravation and emotional toll that come with a contested divorce, there is every reason for the court to encourage the parties to pursue that alternative. I would add that since the date of the hearing, the wife has confirmed that she is willing to give an undertaking to issue a fresh petition based on s.11A(2)(d) of Cap. 159 and, in fact, a summons for leave to file a fresh petition was issued on 26 November 2001, returnable on 3 December 2001. So, apart from dismissing the appeal and allowing the cross-appeal, I would also lift the stay on the wife's petition to avoid any doubt that the stay prevents a fresh petition from being issued.

Hon Beeson J:

28. I agree.

Hon Rogers VP:

29. I agree.