MRS. A by LPCR her next friend V. The Executors of the Estate of A

FCMC 15415/2009 & FCMC 5060/2011

[2018] HKFC 196

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MATRIMONIAL CAUSES NO.15415 OF 2009 and

MATRIMONIAL CAUSES NO.5060 OF 2011

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RULING
( Leave under Rule 121 of Cap. 179A )

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Introduction

1.  The Next Friend of Mrs. A (“the Next Friend”) took out a Summons dated 27^th December 2017 (“the Next Friend’s Summons”) to seek leave to use certain documents filed in the ancillary relief proceedings in FCMC 5060 of 2011 and FCMC 15415 of 2009, (namely the Order of the Family Court dated 19^th April 2011 in FCMC 5060/2011 (“the Settlement Order”) and Form E filed by Mrs. A in FCMC 15415/2009) (“Form E”) to be used in the High Court Proceedings (“High Court Proceedings”).

2.  The background of the case was set out in the Next Friend’s submission which I shall not repeat here.

3.  The stance of the Executors of the Estate of Mr. A (“the Executors”) is that the Executors do not oppose the Next Friend’s proposed use of the Form E in the High Court Proceedings.

4.  As for the Settlement Order, the Executors’ stance is that the Court may make an order to grant leave subject to the imposed conditions, namely, the undertakings and conditions referred to in the Executors submission at paragraph 5.4 (“the Executors’ Proposal”).     

Applicable Legal Principles

5.  The Next Friend referred me to the Court of Appeal case of Re Mong Man Wai [2013] 4 HKC 179 and submitted that :

(1)     Ancillary relief proceedings are held in Chambers, not open to public pursuant to rule 81(2) of the Matrimonial Causes Rules;

(2)     By virtue of the obligation of full and frank disclosure in ancillary relief proceedings, documents disclosed by parties to ancillary relief proceedings are covered by the implied undertaking; and

(3)     The key interest to be protected by the implied undertaking is the privacy and confidentiality of a litigant’s private affairs, given that the compulsion to disclose documents amounted to a serious invasion of the same.

MCR rule 121 (2)

6.  Rule 121(2) of the Matrimonial Causes Rules, Cap. 179A (“MCR”) provides that no document filed or lodged in the registry, other than a decree or order made in open court, shall be open to inspection by any person without leave of the court, and no copy of any of such document, or of an extract from any of such document, shall be taken by, or issued to, any person without such leave.

7.  The rationale of such rule is that matrimonial proceedings are private in nature. For the protection of the parties involved in the proceedings, the documents filed in such proceedings shall not be disclosed in public unless leave of the court seized with the matrimonial proceedings has been obtained: see Horst Joachim Franz Geicke v 1-Onasia Ltd, HCA 2379/2009, 17 October 2011 §32, per DHCJ Lok (now Lok J).

8.  On top of MCR rule 121, the Family Court has the general power of control over access to documents within its custody in common law, and the exercise of the inherent jurisdiction is subject to a balancing test in terms of weighing the relevant conflicting interests and rights: see Secretary for Justice v FTCW & Ors [2014] 1 HKLRD 849, at §§16, 27-28, per Hon Lam VP.

9.  At §114 of the abovementioned judgment, Lam VP at 85 referred to R (Guardian News and Media Ltd) v Westminster Magistrates’ Court [2013] QB 618 and adopted Toulson LJ’s approach as follows:

“In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be countervailing reasons. … I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.”

10.  The Next Friend also submitted that it is a balancing exercise of whether what is sought to be achieved by relaxing the implied undertaking is more important for the administration of justice generally than in maintaining confidentially. The Court should take into account factors such as the nature of the documents, the nature of the information in the document, any prejudice the author of the document may sustain, and the likely contribution of the document to achieving justice in the second proceedings; see Secretary for Justice v FTCW & Ors [2014] 1 HKLRD 849, at §§130-131, per Hon Lam VP.

11.  The Next Friend further submitted that the position of a party to matrimonial proceedings who has passed away has been considered in Re Mong Man Wai, and though there is no clear authority as to whether the right to privacy survives the death of the party, the right to enforce the implied undertaking conferred on the deceased party would pass to the estate : §§54-59.

12.  The executors of the deceased party may appear in an application for disclosure to provide assistance, but they should not advocate any particular outcome. They should set out all the relevant circumstances including an update of the latest development of the case, if necessary, and make submissions on the applicable law. They should not oppose the application for disclosure but should adopt a neutral stance and render any assistance to the Court as may be directed: §§60-61.

13.  I trust that there will not be any dispute as to the above principles.

Discussion

14.  The Next Friend submitted that Form E and the Settlement Order are highly relevant to the High Court Proceedings. The stance of the Executors is that they do not dispute the relevance of the documents sought to the resolution of the High Court Proceedings, (see Kwong’s Affirmation §10 [A/5/21-22]) and the Executors accepted that on the face of it, there is a reasonably arguable basis for suggesting that the whole Settlement Order is relevant to the High Court proceedings.

15.  The Executors however say that they have an interest in protecting the privacy and confidentiality of Mr. A, and thus they raised concerns as to the scope of any order of disclosure to be granted by the Family Court related to the Settlement Order.

16.  The main issue here is that what scope of the order should be given for the use of the Settlement Order in the High Court Proceedings, namely, the terms of the disclosure.

17.  The Executors’ Proposal aims at preserving the privacy and confidentiality of the information contained in the Settlement Order to a certain scope and limits even leave was granted to be used in the High Court Proceedings.

18.  The Next Friend considered that the Executors’ Proposal is impracticable and the Next Friend’s stance is that it is necessary for the whole of the Settlement Order to be used in the High Court Proceedings, and the order by the Family Court for an in camera hearing in the High Court Proceedings is totally unworkable.

19.  According to the Executors’ Proposal, the Executors suggested that except with the leave of the Family Court

(1)     The content of the Settlement Order shall not be referred to or otherwise disclosed in open court, or to any persons other than:

(i)       the Judge hearing the High Court Proceedings; and

(ii)     the parties (and their advisors), and the parties’ witnesses (and those witnesses’ advisers) (the “Approved Persons”).

(2)     Any reference to the contents of the Settlement Order in written submissions or evidence shall not be read out in open court or disclosed to any persons other than the judge hearing the High Court Proceedings and the Approved Persons.

(3)     Notwithstanding the above, the amount of the settlement sum in the Settlement Order may be referred to as “the settlement sum”.

20.  The Executors submitted that where disclosure is considered necessary, the Court nevertheless has a very broad and flexible discretion to devise solution to preserve confidential information to the extent possible.

21.  The Executors relied on TCWF v LKKS [2013] HKFLR 456 §30-35 [E#1] and explained that in the context of balancing the interests of open justice with other concerns, there are different aspects of open justice, which may involve different balances being struck.

22.  The Executors further submitted that open justice implies members of the public (including the public media) would have access to the hearing, may seek access to the documents filed and used at the hearing but not expressly read out at the hearing, and report or publish information on what actually happened at the hearing.

23.  It was also submitted that open justice means that the judgment of the court is published generally without any redaction and that the names of the parties would be made known to the public without any anonymity.

24.  The argument of the Executors is that the curtailment of one aspect of open justice does not necessarily dictate the curtailment of another aspect.

25.  The chief concern of the Executors is that what measures could be adopted to, on the one hand, allow the Settlement Order to be used, and on the other hand, protect Mr. A confidentiality and privacy.

26.  I accept that the Settlement Order is relevant to the High Court proceedings and disclosure is necessary, otherwise the Next Friend will not be able to proceed with the case and put forward the argument in the High Court proceedings.

27.  The Next Friend submitted that Mrs. A stated that the total value of her asserts following her divorce were not less than HK$15 billion. The case that needs to be established in the High Court proceedings is that the HK$15 billion figure comprised of (1) the settlement sum under the Settlement Order (2) the value of Mrs. A assets listed in the Form E; and (3) an element of appreciation in the value of the property referred to as 8MA.

28.  Based on the aforesaid principle, the Court has to carry out a proportionality exercise which will be fact-specific.  Central to the Court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.

29.  The Next Friend argued that in order to explain the composition of the HK$15 billion figure, it needs to be shown that the HK$7 billion settlement sum was the only significant amount provided for under the Settlement Order and that no other assets of appreciable value were included, and this can only be done if the Settlement Order is disclosed in full which I accept and agree with the Next Friend’s observation.

30.  The Next Friend further argued that the order by the Family Court for an in camera hearing in the High Court proceedings is unworkable. It is very likely that other parties and the Court would need to refer to the Settlement Order, the witnesses would be cross-examined on the composition of the HK$15 billion figure and that any decision by the High Court would also need to make reference to the Settlement Order when ruling on the issue and explaining its reasoning.

31.  The Next Friend also argued that to require the High Court to hear the matter in camera in part may inhibit the High Court from making findings touching on the documents and explain its reasoning in an open judgment, and it hardly seems appropriate for the Family Court to prescribe how the trial judge in the High Court should conduct the proceedings in the High Court, given that, quite apart from the question of jurisdiction, the case management decision of how to handle the High Court proceedings should plainly be left to the High Court.

32.  My view is that the Executors suggested to impose a condition that the contents of the Settlement Order shall not be referred to or otherwise disclosed in open court except with the leave of the Family Court is not only unworkable but also causing injustice to the parties in the High Court proceedings.

33.  Firstly, I consider that imposing a condition to the effect that an in camera hearing will be necessary in the High Court proceedings is inappropriate, as the Family Court will as a result take control of not only the case management decision of the trial judge in the High Court proceedings but also seized the jurisdiction of the trial judge in the High Court to decide which part of the evidence should be heard in open court.

34.  Secondly, if the Executors’ proposal were to be granted, I cannot imagine how it can be executed smoothly without causing disruption to the proper conduct of the trial of the High Court proceedings.

35.  I agree with the observation made by the Next Friend that the whole of the Settlement Order will be relevant, as one of the main issues and facts finding to be determined in the High Court proceedings will be the composition of the HK$15 billion figure.

36.  By reason of the aforesaid, I can appreciate that parties and witnesses in the High Court proceedings would be cross-examined on the composition of the HK$15 billion figure and would inevitably need to refer to the content of the Settlement Order and the figure of the settlement sum.

37.  If they are inhibited from referring to the content and the figure in open court, it will make it difficult for them to explain the calculation, and there will probably be a need to come back to the Family Court again to ask for further leave. This would imply further delay and substantial disruption to the High Court proceedings. This result would cause severe injustice to all the parties in the High Court proceedings.

38.  My view is that the potential value of the material, namely the full content of the Settlement Order in advancing the purpose of putting forward the Next Friend’s case in the High Court proceedings will be defeated if the content of the Settlement Order could not be referred to freely.

39.  My view is that weighing the relevant conflicting interests and rights, the use of the Settlement Order without restriction shall prevail over Mr. A’s privacy and confidentiality to the Settlement Order.

Order

40.  Accordingly, I will make the following order:

(1)     leave be given to Mrs. A through the Next Friend to disclose, use and adduce in HCA 1739/2010 and CACV 241/2016 and any appeal arising therefrom, the Form E filed by Mrs. A in FCMC15415/2009 and the Order of the Family Court dated 19^th April 2011 in FCMC 5060/2011, and

(2)     For the purpose of the order above, Mrs. A and/or the Next Friend be released from (1) any confidentiality restrictions imposed by the Court in previous orders made herein, and (2) any implied undertaking not to use the above documents for any purposes not relating to the proceedings herein.

55.     As to the issue of the costs, parties have agreed that it shall be deal with by paper disposal and written submissions only.

56.     Parties had also agreed to file and exchange their respective written submission in the following manner, namely:

(1)          respective written submissions be filed and exchanged within 14 days from the date of this order, and

(2)          respective written submission in reply be filed and exchanged 7 days thereafter.

57.     I now give the direction that the issue of costs be dealt with by paper disposal and further submission on costs be filed and exchanged as per paragraph 56 above.

58.     Lastly, I thank all the counsels for their assistance.

Representation: