L, T v. M, MD

FCMC 5131/2019

[2021] HKFC 162

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 5131 OF 2019

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RULING

(Decree Absolute)

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Introduction

1.  This is an application by a Respondent husband for a decree absolute pursuant to section 17(2)(a) of the Matrimonial Causes Ordinance, Cap 179 and Rule 65(4) of the Matrimonial Causes Rules, Cap 179A.  In his summons, dated the 6 May 2021, the husband makes this application by simply stating as follows:

Application for Decree Absolute by the Respondent

Background

2.  This is a very high conflict case concerning a Russian wife and a French husband, who are currently both living and working in Hong Kong. They have two young children together.

3.  In his submission filed in support of his application the husband set out the basic facts as follows:

THE FACTS

1. Decree Nisi was given on 20 August 2019.

2.   On 6 September 2019, the Court Order regarding the finances was made by Her Honour Judge Melloy.

3.   On 11 January 2021, after a very lengthy litigation, the Court Order regarding children matters was made by Her Honour Judge Melloy.

4.   Between 15-22 January 2021, after all matters were resolved, both parties corresponded with the Court to argue about whether or not s18 declaration should be granted. The Petitioner asked the Court not to grant it. Her position was that «If a s18 declaration is granted, and this subsequently leads to a Decree Absolute, the Respondent will simply leave the jurisdiction of Hong Kong and will not fulfil his financial obligations towards her and the children». My position was that those were purely assumptions on her part and simply not true. I asked for s18 declaration to «get closure, move forward and ease tensions».

5.   On 1 February 2021 Her Honour Judge Melloy granted the s18 declaration.

4.  Notwithstanding the granting of the s.18 declaration, the decree absolute has still not yet been granted.    

The law

5.  Section 17(2)(a) of the Matrimonial Causes Ordinance, Cap 179 states as follows:

17. Proceedings after decree nisi

 (2)     (a)  Where a decree nisi of divorce has been granted and no application for it to be made absolute is made, then, at any time after the expiration of 3 months from the earliest date on which such an application could have been made, an application for a decree absolute may be made by -

(i)   in a case where the decree nisi was granted on a petition for divorce, the person against whom it was granted; or

(ii)  in case where such a decree was granted on an application for divorce, either of the parties by whom the application was made.

Rule 65(4) of the Matrimonial Causes Rules, Cap 179A adds:

(4)  An application by a spouse for a decree nisi pronounced against him to be made absolute may be made to a judge or the registrar, and the summons by which the application is made (or, where the cause is pending in the District Court, notice of the application) shall be served on the other spouse not less than 4 clear days before the day on which the application is heard. (L.N. 26 of 2002)

6.  The leading Hong Kong case on this point is the Court of Appeal decision in JAH v VH (Decree Absolute) [2013] HKFLR 664. This case also concerned a Petitioner wife, who did not wish a decree absolute to be granted, in that instance because she was concerned that she might be severely prejudiced financially if a decree was granted before the ancillary relief order had been effected. Mr Justice Cheung JA identified the proper test in such circumstances by reference initially to the case of Dart in England and Wales, as follows:

VI. What is the test?

7.2 The Judge held [in Dart] that the proper test is that ‘the opposing spouse must establish special or exceptional circumstances to satisfy the Court that it is just to refuse the grant of a decree absolute.’ He then held that ‘when the opposing spouse raises financial prejudice before determination of the ancillary relief as a special or exceptional circumstance, he/she must prove that the prejudice as alleged is real, failing which the mere fact that the ancillary relief is yet to be determined is not sufficient’.

7.3 I have no doubt that when the respondent spouse against whom the decree nisi was made invoked the inherent jurisdiction of the Court, as in Dart, to delay or stay the making of a decree absolute, special or exceptional circumstances must be established. After all, the petitioner spouse for whom the decree nisi was made in his or her favour is entitled to have it made absolute as of right.

7.4 What then is the position when it is the petitioner spouse for whom the decree nisi is made in his or her favour wishes to delay the making of the decree absolute? The reality is as Thorpe LJ observed in Manchanda v Manchanda [1995] 2 FLR 590 at page 596 that:

‘ …. Many petitioners have applications for ancillary relief that are not finally determined until long after the decree nisi. For many reasons they are generally loath to lose their marriage status until financial claims have been settled. If they are to lose that protection it should only be in the exercise of a judicial discretion after they have had a proper opportunity to present their opposition.’

7.5 As against this, there is the public policy consideration discussed in Blunt v Blunt [1943] AC 517 which is relied upon by Mr Pilbrow SC, counsel for the husband, that the interest of the community at large, judged by maintaining a true balance between respect for the binding sanctity of marriage and the social considerations which make it contrary to public policy to insist on the maintenance of a union which has utterly broken down.

7.6 In my view the public policy of ensuring a marriage that has been irretrievably broken down be put to an end without further ado must be subject to an equally important public policy of ensuring the spouse who opposes the making of a nisi absolute, must not be prejudiced in terms of financial provisions by way of ancillary relief.  It is not necessary for me to come to a view whether the ‘special or exceptional circumstances’ test is to apply to a case like the present one where it is the petitioner spouse who opposes the making of a decree absolute.  It is sufficient for me to say that, based on the authorities, the Court may refuse to make the decree absolute, if the opposing spouse can truly establish financial prejudice. This is the test that the Judge had actually applied in the present case.

7.  In this instance the situation is a little different in that the final ancillary relief order has already been made. The wife is seemingly alleging the possibility of financial prejudice notwithstanding the fact that there is a final order in existence. Her concern is that the husband may leave Hong Kong inter alia before he has paid her the full amount due and owing under the order.

The order on final ancillary relief dated the 4 September 2019

8.  The main bone of contention between the parties relates to Recital J (vii). This states inter alia as follows:

J.    AND UPON the Respondent's [husband’s] undertaking to the Court and to the Petitioner [wife] to pay the Petitioner a lump sum of HK$3,352,402.50 by direct transfer into the Petitioner's HSBC account no. 8XX-1XXXXXX-8XX by the following instalments (lithe Lump Sum"):-

(i)    HK$282,402.50 already paid to the Petitioner on 21 August 2019;

(ii)   HK$800,000 to be paid on or before 9 September 2019;

(iii)    HK$1,050,000 to be paid on or before 27 March 2020;

(iv)    HK$800,000 to be paid on or before 25 September 2020;

(v)     HK$320,000 to be paid on or before 26 March 2021; and

(vi)    HK$100,000 to be paid on or before 27 September 2021.

(vii)   For the avoidance of doubt money paid to the Petitioner from the Swiss Pension Fund identified in paragraph 2.12 of the Respondent's Form E shall form part of the Lump Sum instalments.

9.  Recitals K, L and M add as follows:

K.  AND UPON the Respondent and the Petitioner undertake each other to the Court that they will take all necessary steps as expeditiously as possible to facilitate the payment from the Swiss Pension Fund referred to in Recital J(vii).

L.   AND UPON the Respondent undertaking to the Petitioner and to the Court to pay for all costs necessary to facilitate the payment from the Swiss Pension referred to in Recital J(vii).

M.  AND UPON the Respondent agreeing and undertaking to the Court and to the Petitioner that the Lump Sum payment as set out in Recital J above shall be secured by a charge against the Respondent's property in France at 4, rue de Longchamp, Neuilly, France ("the French Property"), and the Petitioner shall be able to enforce payment of the Lump Sum in the event that the Respondent fails to pay any of the instalments of the Lump Sum by selling the French Property. The Respondent shall also be responsible for giving effect to such arrangement on or before 27 September 2019.

10.  For the avoidance of doubt the husband’s Form E refers to the Swiss Pension fund at paragraph 2.12, as stated in paragraph J (vii). This states that:

Description of benefit	Current Value	Date Realizable	Value of maturity
Pension Fund PM in Switzerland	CHF 266,418.75 as at 3 May 2019	On retirement, the date of which is unknown	Unknown

11.  The first order also refers to a lump sum payment as follows:

BY CONSENT, IT IS ORDERED that :-.

1.     The Respondent do pay to the Petitioner a lump sum of HK$3,352,402.50 in the manner as set out in Recital J above.

12.  In addition, paragraph F states that:

F.     AND UPON the Petitioner and the Respondent undertaking to the Court and to each other that they will each carry out any acts and execute any Deeds or sign any documentation if necessary, without any undue delay, in order to bring into effect the terms of their agreement and the order herein.

The husband’s case

13.  It is the husband’s case that after the sealing of the order that it came to light that he could only access the monies in his pension fund post decree absolute. This is not accepted by the wife. The wife then chose not apply for a decree absolute and seems to have taken the position that the husband should pay for the lump sum from other sources in any event. In his letter to the court dated the 17 March 2021, the husband tried to come up with a practical solution and suggested varying the court order.

In order to save time and money on both side, but most of all to prevent any further complication or communication on the issue, I would like to apply for the Court to vary the Order dated 4 September 2019 on Recital J. point (vii) and specify that the money paid to the Petitioner from the Swiss Pension Fund identified in paragraph 2.12 of the Respondent's Form E will cover Recital J points(iv) HK$800,000 to be paid on or before September 2020; and (v) HK$320,000 to be paid on or before 26 March 2021.

In other words, for the avoidance of doubt the Swiss Pension Fund will be used to pay points (iv) and (v).

This particular point (vii) has brought both parties and the Court enough uncertainties and complications, and I believe this will resolve a conflict over a provision in the Order dated 4 September that has been going on for long already. This would enable the Petitioner to finally get the money she is waiting for and put this issue to rest.

14.  The difficulty however, is that although the court can, in certain circumstances release a party from an undertaking or vary a lump sum payable by instalments, it has no jurisdiction to vary a lump sum order as set out in paragraph 11 above.

The wife’s case

15.  The wife raises new issues with respect to the Swiss pension fund in her submission, which are largely irrelevant to the issue in hand. She is also of the view that according to her information the husband should be able to access some of the funds in any event. She is also concerned that the husband may be planning to leave Hong Kong before paying her the full amount due and owing under the order. She also asks that he pay her the taxed costs arising out of the taxation hearing, which was due to take place on the 29 June 2021. To that end it is of note that on the 27 April 2021 this court handed down a Ruling in which it made no order as to costs with respect to the children’s litigation. The wife is seeking leave to appeal that ruling which will be handed down together with this Ruling.

16.  In the wife’s conclusion she stated as follows:

CONCLUSION

From the beginning of this divorce procedure until now, facts are as below: the Respondent reneged the Mediation agreement and is in breach of the court order on the Ancillary relief, has done all he possibly could to drag the procedure as long as possible, systematically refused to mediate, put all his efforts in concealing the pitfalls of the SPF's issues, refused to release his banks' accounts statements, and now that I am asking him to bear the financial costs of his own strategy, he awkwardly and conveniently portrays himself as a victim having "no cash anymore" although facts point at the exact opposite. Today, with all of the respondent's assets being abroad, it is already extremely hard, long and costly to enforce the fulfilling of the respondent's financial obligations (SPF release and French flat's mortgage to start with). The Respondent's attitude during the whole procedure, combined with his anticipated departure from Hong Kong, will complicate legal matters even further, including the enforcement of taxation decision the court is expected to make end of June and the payment of the legal fees I had to bear since September 2019. Granting a DA now will give the Respondent all the freedom he needs not to fulfil any of his financial obligations with almost full immunity, although, his funds and assets are more than sufficient to do so now and in the foreseeable future.

I am therefore respectfully asking the Court to make an order not to grant the DA until:

1.   The Respondent fulfils all his financial obligations towards me:

I.   Pay the rest of the lump sums according to the court order of Sep 4th, 2019

II. Fulfil the financial obligation resulting from the taxation hearing taking place on June 29.2021.

2.   There is a decision pending on the leave to appeal submitted by me to the Court on May 24^th 2021 for the Order of the costs I have beard since Sep 2019 until now and, respectively, the appeal and the order execution by the Respondent.

With respect I do not accept all that is said here.

17.  In so far as the wife’s concerns about the husband leaving Hong Kong, she wrote to the court again in this respect on the 16 June 2021, as follows:

I refer to Petitioner's Submission of June 7th 2021.

Petitioner claim about his job, described in point 13, is purposely vague and misleading. If his employment is secured, it is certainly not with the current employer, as I have learnt some 2 weeks ago that PMI has terminated his contract and he will leave the company in October 2021 if not earlier. The fact that he does not release this information is a clear indication that all the consequences linked to that, predicted in my own appeal submission, are therefore very real.

18.  The husband responded as set out below:

I refer to the Petitioner's letter to Court dated 16th June 2021.

I wish I didn't have to defend myself against false accusations again, but I can't let the Petitioner try to influence the Court against me this way.

For the avoidance of doubt, my contract has not been terminated, I am not leaving the company in October 2021 or earlier and I was not keeping this information from the Court.

Please find attached a copy of my working visa (valid until 12.05.2024), which was recently renewed by my employer Philip Morris International, as well as an email from my supervisor, confirming that my contract has not been terminated.

Having to ask my supervisor justifications such as this one put me in a very delicate and humiliating position, especially at my level of seniority.

This is yet another proof that the Petitioner is trying to mislead the Court not based on facts and doesn't shy away from using lies to justify her assumptions.

I hope that Your Honour will take this into serious consideration.

19.  For the avoidance of doubt I accept what he says in this respect namely that there is evidence to support his stated position that he has no intention of leaving Hong Kong at present. 

Decision

20.  It seems to me that there is a circular aspect to the argument relating to the Swiss pension fund, which is not helpful for anyone. It was clearly in the contemplation of the parties at the time that they entered into the consent summons in September 2019, that the husband would need to resort to the Swiss Pension fund in order to pay the wife the lump sum ordered. Indeed, both parties undertook to take all necessary steps to facilitate that payment. In the circumstances it seems to me those steps should have included an application for a decree absolute.

21.  There is a real risk of financial prejudice to the wife if she does not receive her lump sum payment. I accept that the husband may not be able to access those funds until he has received the Decree Absolute. Thus it is imperative that the Decree Absolute be granted. There is no evidence to support the wife’s fears that the husband may leave the territory without paying her. The issue of legal costs is a different point and should not be permitted to muddy the waters. I do not know what costs are owed to the wife, if any at all as things stand, save for the costs due under the ancillary relief proceedings. No quantum has been provided in that respect.

22.  I will therefore make the order that the husband seeks i.e. that the decree absolute in this case shall be granted forthwith. This is on the understanding that he will then immediately take steps to liquidate the Swiss pension fund (or parts of it) and pay the wife what is due and owing to her under Recital J. In order to provide the wife with some comfort in that respect, I shall further order that a penal notice shall be endorsed on the order dated the 4 September 2019. I should add that it seems to me that it would certainly be helpful in the circumstances if all payments could be made to the wife by the 27 September 2021 as had been originally contemplated.

23.  Costs shall follow the event in the normal way. Therefore, the wife shall pay the husband’s costs of and occasioned by his summons dated the 6 May 2021, to be taxed on a party and party basis if not agreed.