NHUT v. WKM

FCMC 8223/2020

[2024] HKFC 39

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. FCMC 8223 OF 2020

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  Leave to appeal

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Introduction

1.  The respondent’s (“the Husband’s) filed his summons on 28 November 2023 for leave to appeal against my decision handed down on 12 October 2023 (“the Decision”). In the Decision, I dismissed the Husband’s application to join his sister as the 2^nd intended respondent (“the Husband’s Sister”) as a party to this ancillary relief proceedings.

2.  The Husband’s summons should be filed by 26 October 2023, his application was made out of time for a period of 33 days.

3.  The Husband’s summons was served on both the petitioner (“the Wife”) and the Intervenor (“Madam L”) and the Husband’s Sister. The Wife takes a neutral stance in Husband’s leave to appeal application.

4.  I shall adopt the same abbreviations used in my Decision.

Background

5.  By way of background, the Wife and the Husband settled the ancillary relief by filing a consent summons on 14 September 2020.  The settlement involved a transfer of property (“the two Units”) by the Husband to the Wife at nil consideration within 90 days after the making of decree absolute.  The registered owners of the two Units are the Husband and his sister as joint tenants.  To carry out the settlement between the Husband and Wife, an order of severance was obtained by the Husband on 16 September 2020 that the Husband and sister to hold the two Units as tenants-in-common.  The Wife’s position on ancillary relief settlement was in line with the above arrangement, being ½ share of the two Units, i.e. the Husband’s share only.

6.  Subsequently, Madam L, the Husband’s mother intervened aiming to claim the entire beneficial interest of the two Units saying that both the Husband and his sister have been holding the title of the two Units on trust for Husband’s later father of whom has passed away on 24 November 2018. Subsequently, on 22 July 2019, Madam L obtained letters of administration of the late father’s estate. Madam L said, at all times, the Husband is not the beneficial owner of the two Units and therefore has no right to transfer the same to the Wife.  The Husband’s sister acceded to Madam L’s saying, as expected, the Husband opposed.

7.  After Madam L’s intervention, the Husband changed his stance substantially by saying, he has beneficial interest of the entire two Units.  The Husband said he who has paid for all purchase price of the two Units, his sister has been holding title and interest on trust for and on his behalf.  The situation shifted in a way that the Husband is competing for beneficial interest in the two Units with Madam L. Not only this, the Husband expanded his case by seeking an order to determine the ratio of beneficial interest between himself and his sister.  By reason of this, the Husband applied to join his sister as a party (the intended 2^nd respondent) in the ancillary relief proceedings.  

8.  I dismissed the Husband’s application to join the intended 2^nd respondent because the requirements of joinder pursuant to Order 15(6) of the Rules of High Court, Cap 4A are not met.  Briefly, the issue of determining beneficial interest (and ratio) between himself and his sister is a non-issue in the ancillary relief hearing.  The Wife’s claim is only ½ share of the Husband’s title and interest in the two Units.

Applicable Legal Principles

9.  Section 63A of the District Court Ordinance, Cap 336 states leave to appeal shall not be granted unless the appeal has a reasonable prospect of success or there are some other reason in the interest of justice that the appeal shall be heard.  A reasonable prospect of success is that the prospect of succeeding is reasonable, more than fanciful but without having to be probable. (see Hong Kong Civil Procedure 2024, Vol 1, para 59/2A/4)

The grounds of appeal

10.  Ms Lam, counsel for the Husband submitted I have erred in refusing the Husband’s Sister to join the proceedings, more particularly failed to have considered a two-limb test pursuant to Order 15 rule 6(2)(b),

“[the Court may]…order any of the following persons to be added as a party, namely—

(i) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon,

or

(ii)  any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter.”

11.  The Husband submitted, notwithstanding his sister and himself are the legal owners of the two Units, his sister is holding beneficial interest of her share for and on behalf of the Husband.  On the other hand, the Intervenor’s and his sister’s case is that, notwithstanding the Husband and her sister are legal owners of the two Units, the estate of the late father shall have beneficial interest of the entire two Units.  The issue in dispute is the beneficial ownership of the two Units. For this reason, the Husband’s Sister  has to be joined as party for determination of an outcome.

12.  The two-limb test shall be applied in the context of ancillary relief issues between the Husband and the Wife.  When the Wife’s claim is aiming at ½ share of the two Units held by the Husband, by joining Madam L as an intervenor, the disputed issue, being the beneficial ownership of the Husband’s ½ share of the two Units is able to be “effectually and completely determined and adjudicated upon”.

13.  The other ½ share of the two Units (the Husband’s Sister as legal owner) is an issue between the Husband and his sister, not an issue of the ancillary relief between the Husband and Wife.  There is no competing claim between the Wife and the Husband’s Sister on the other ½ share of the two Units.

14.  Ms Wong, counsel for Madam L and the Husband’s Sister has correctly cited LLC v. LMWA [2019] HKLRD 529, at paragraph 25, Hon Lam Acting CJHC (as he then was) gave clear guidance on this matter,

“25. Further, even in cases where a spouse seeks a proprietary order in respect of the disputed property, the third party must be involved only if he or she has a competing claim to that property. [emphasis added]”

15.  The above judgment also covers the present situation when the Husband makes claim to compete beneficial ownership with his sister, the latter shall be bound by the judgment if she elected not to join as a party once being notified. (See: Order 15 rule 13(A)(4) of the Rules of the High Court, Cap 4A):

“….In this respect, there is a difference between cases where the third party is the legal owner or one of the legal owners of the disputed property and cases where a spouse claims that the third party has a beneficial interest in a property legally held under the name of that spouse. In the former case, the third party should be joined as a party since the legal title of the disputed property would have to be transferred or subject to encumbrance if the ownership issue is resolved by the making of a proprietary order. In the latter case, the third party should be notified of the claim and if he or she decides to contest the ownership issue, he or she should apply to be joined as party to the proceedings. If the third party does not apply to be joined, he or she shall be bound by the judgment: see Order 15 Rule 13A(4) of the Rules of the High Court, applicable by virtue of Rule 3 of the Matrimonial Causes Rules. [emphasis added]”

16.  I do not accept there is question or issue arising out of the relating to or connected with the beneficial ownership of the two Units between the Husband and his sister. In my opinion, it is not be just and convenient to determine this said dispute in this ancillary relief proceedings.

17.  The Husband’s ground of appeal is unmeritorious.

Time extension of application for leave to appeal

18.  The principles of leave to appeal out of time is well established.  The Court will take into account the length of delay, reasons of delay, the chances of appeal if an extension of time is granted and the degree of prejudice to the other party if the application was granted. (See Tang Chai On v. Tan Sing Ki [2016] 5 HKLRD 104)

19.  The present application was taken out 33 days after the 28-day prescribed period, the delay in lodging the appeal is substantial. (See Carl International (HK) Limited v. Ernest Komrowski Co [1996] 2 HKC 490 and Re: Ireland Muhammad (unrep, CAMP 112/2018, 14 December 2018)

20.  The Husband was legally represented, he admitted he was duly informed by his legal representative the time limit for applying leave to appeal.

21.  The Husband explained he did not have the financial means to retain his solicitors and to instruct counsel.  He deposed in his affirmation filed on 28 November 2023 that, he was only able to settle his legal fees after salary payment by the end of October 2023.  However, I note from the Husband’s Statement of Costs, the costs of this application is as high as HK$179,552, a sum exceeded his monthly salary HK$60,630.  Apart from this, the Husband claimed he has only HK$5,000 disposal monthly after paying all expenses.  In light of the disparity of figures, I do not accept the Husband’s means is a reason for delaying this application for leave to appeal.

22.  Even so, nothing has barred the Husband to apply for an order of time extension to apply for leave to appeal before the prescribed period.

23.  Madam L was joined as an Intervenor as early as 11 May 2021, trial of preliminary issue cannot be fixed for reason of the Husband’s chance of stance. Bearing in mind to dispose ancillary relief in an expeditious manner, the Husband’s delay in taking out application for leave to appeal is unacceptable and it will cause prejudice to the Wife. 

24.  I refuse to accept the Husband’s application for leave to appeal out of time.

Conclusion

25.  With reasons of the foregoing, the Husband’s ground of appeal demonstrates no reasonable prospect of success and there is no other reason in the interests of justice why the appeal should be heard.

Orders

26.  I make the following orders:

(i) The Husband’s summons filed on 28 November 2023 be dismissed.

(ii) An order nisi that (i) the Husband do pay Madam L’s and the Husband’s Sister’s costs of his summons filed on 28 November 2023 forthwith, with certificate for counsel, to be taxed if not agreed; (ii) the Wife’s costs of his summons be reserved.

(iii) The order nisi be made absolute in absence of application to vary by summons within 14 days hereof.