LWH also known as WHHL v. NKWS also known as KWSN

CAMP 14/2018

[2018] HKCA 260

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 14OF 2018

(ON AN INTENDED APPEAL FROM FCMC NO 2953 OF 2015)

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REASONS FOR JUDGMENT

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Hon Lam VP (giving the Reasons for Judgment of the Court):

1.  This is a renewed application for leave to appeal against the findings of Judge Melloy in FCMC 2953 of 2015 on preliminary issues. In FCMC 2953 of 2015, the Wife (W) petitioned for divorce on 13 March 2015 on the ground of the Husband’s (H’s) unreasonable behavior. Decree nisi was granted on 17 November 2015.

2.  In the context of the application for ancillary relief, preliminary issues arose concerning the beneficial ownership of several companies.  The Wife and her sister Ip and the latter’s husband J (the Interveners) claimed that the Interveners were the beneficial owners of two companies: PCHK and OB.  They also claimed that three other companies (PCH, PCA and Bozz) were “in part beneficially” owned by the Interveners.  H’s case is that all these companies and the assets of these companies were jointly and severally owned by him and W.

3.  After a trial which lasted for 13 days, the Judge handed down her judgment on 13 June 2017 rejecting the case of W and the Interveners.

4.  By a Costs Decision of 6 November 2017, the Judge ordered W and the Interveners to jointly and severally pay H’s costs on an indemnity basis.  After considering the submission of H’s counsel (which the learned Judge agreed), the learned Judge stated at §15 of that Decision:

“ … this is not a situation where the parties each had a genuine case and each simply fought their corner hard; rather this is a case where on the face of it the wife and the interveners have deliberately sought to mislead the court. Such action cannot and should not be tolerated. It seems to me that there was clearly an ulterior motive here and the court has been affronted not only by the substance of the allegations made – which were often entirely without merit, but also by the way in which the case has been presented in the court. The trial ran over its original time estimate and the parties spent 13 days in trial. This was entirely unnecessary. It was also a waste of the court’s time and resources.”

5.  In their application for leave to appeal before the learned Judge, W and the Interveners relied on 10 grounds for the intended appeal.  By a Decision of 29 January 2018, the Judge concluded that none of the grounds had any reasonable prospect of success and she refused to grant leave.

6.  By a summons of 12 February 2018, W and the Interveners renewed the application for leave before us.  We heard the application on 2 May 2018. After hearing counsel, we refused to grant leave. Here are our reasons for the refusal of leave.

7.  In the draft Notice of Appeal attached to the summons for this renewed application for leave to appeal, W and the Interveners relied on substantially the same intended grounds of appeal as advanced before the learned Judge.  A new sub-paragraph (d) was added to Ground 5.

8.  We are substantially in agreement with the Judge as to the grounds already canvassed in the court below.  We only need to make the following additional comments. The intended appeal is basically a challenge to the findings of fact and assessment of credibility of the witnesses.  The approach of this Court in an appeal of such nature is well established: unless the intended appellants can demonstrate any palpable errors to persuade us that the findings are plainly wrong, we would not intervene.  See China Gold Finance Ltd v CIL Holdings Ltd CACV 11/2015, 27 November 2015; ZJW v SY CACV 10/2017, 1 December 2017.

9.  Some of the grounds concerned the adequacy of reasons given by the Judge in rejecting the case of W and the Interveners.  One of the grounds was that the Judge made it clear that she would not deal with tiny points.  We failed to see how this can be a ground of complaint.  This Court has repeatedly said that a judge is not obliged to deal with each and every point raised by counsel or litigant in their evidence and submissions. It is sufficient that the Judge gave adequate reasons to explain how the evidence has been weighed.  It is an impossible task (and very often it would do more harm than good) if a judge has to rebut the arguments and evidence in great minutiae. We wish to emphasize again that it is not the function of a judgment to address each and every point in arguments or evidence without regard to the significance of the same in the overall exercise in assessment of facts and evidence.

10.  Having read the judgment of 13 June 2017, we are of the clear and firm view that the Judge had carefully assessed the relevant evidence and given adequate reasons on the issues which called for determination.

11.  As the Judge said in the judgment, there is no hard evidence that the Interveners had contributed financially to these companies.  The origin of their case was said to be the secret investment from Ip’s personal savings which were used for the purchase of the Cornwall Avenue Property in the name of W.  The Judge adequately explained why she rejected the bare assertions of W and Ip in that regard.  We cannot find anything in any of the grounds of appeal which warrants this Court reversing such conclusion.

12.  Whilst there was a declaration of trust by H over the OB shares in favour of W, it is plain to us that the Judge was correct in holding that things had changed after OB ceased to function as a service company for W and became a holding company for their matrimonial home, the acquisition of which both H and W had made contributions. 

13.  In respect of the initial holding of shares of PCHK in the names of the Interveners, we do not agree with the submission that there was no evidence to support the finding of litigation risk by the Judge. The Judge had alluded to the relevant evidence (the letter from solicitors acting for C&S) and the solicitation of staff of C&S and customers by W when she and H commenced their own garment trading business.  

14.  Having regard to the state of pleadings, we agree with the Judge that W and the Interveners should not be permitted to run the so-called sham business arguments. 

15.  We are not persuaded that the Judge erred in not accepting that the accounts of Boomcome demonstrated J was a man of wealth. 

16.  As regards the so-called evidence of injection of funds by the Interveners, the 1996 pay-in slip (for the sum of $630,000) does not show that the money came from the Interveners.  In respect of the $1 million cheque of October 1998 collected by H on behalf of J, there is no evidence to show that the money was deposited into PCHK or the account of H. The same observation applies to the cheque stubs in respect of the cheques allegedly drawn in favour of H by the Interveners. 

17.  Ultimately, as the judge observed correctly at §2 of the judgment, the resolution of the preliminary issues in the present case hinges very much on the credibility of the parties.  Having correctly directed herself to the approach in assessing credibility, and having given adequate reasons for not accepting the evidence of W and the Interveners, the judge’s findings of fact would not be disturbed by this Court.

18.  At the hearing before us, Mr Pilbrow SC (together with Mrs Remedios, appearing for W and the Interveners) laid emphasis on three core facts to support his submission that the judge’s findings were plainly wrong. With the greatest respect, we do not think the so-called core facts (1) and (2)[1] must lead to such conclusion. As to core fact (3), the judge gave adequate reasons for finding that J was not the only possible source of fund in respect of the purchase of the Cornwall Avenue Property. We do not detect any palpable error in the reasoning of the judge in such finding and we do not find her conclusion to be plainly wrong. 

19.  In respect of the Costs Decision, it is plain from a fair reading of the Decision of 6 November 2017 that the judge did not award indemnity costs solely on account of her finding on credibility.  As it has been said repeatedly, costs are very much a matter of discretionary judgment for the judge and this Court will only intervene in very limited circumstances, see Ho Shu Kwong v Chiang Chun Yuan [2002] 3 HKLRD 419; Hung Fung Enterprises Holdings Ltd v Agricultural Bank of China [2012] 3 HKLRD 679; Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815.  In our view, counsel for W and the Interveners failed to show that there is any arguable basis for this Court’s disturbance of the award of indemnity costs against them.

20.  For these reasons, the intended appeal is unmeritorious and has no reasonable prospect of success.  Nor is there any reason why this Court should hear the appeal in the interest of justice.  Accordingly, the application for leave to appeal was dismissed with costs.