GM-SA also known as DG,M S v. DDPJ

FCMC 9657/ 2016

[2018] HKFC 164

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 9657 OF 2016

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RULING
(Jurisdiction)

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Introduction

1.  This hearing arose out of the Petitioner wife’s summons dated the 8 February 2018. In it she seeks further directions in relation to chattels held at the former matrimonial home and in relation to the former matrimonial home itself and other matters concerning discovery etc. It is the husband’s case that the court has no jurisdiction to hear the summons. This is disputed by the wife.

The issue

2.  It follows then that there is currently only one discreet issue for the court to determine. Does the court have the jurisdiction to hear the wife’s summons, or is it, as has been suggested by counsel for the husband, ‘functus”?

Background   

3.  I do not intend to go into a great deal of the background. Suffice it to say that this has developed into a chronic high conflict case. In this court’s Ruling dated the 24 April 2017 I set out some of the basic and undisputed facts as set out below. It is of note that this is in the context of the husband’s application for leave to appeal, which was refused.

4. In this instance the Respondent husband seeks leave to appeal not against any judgment or ruling, or indeed against any decision made by this court at all, but against an undefended decree nisi and two consent summonses. In a separate application he has also sought to rescind the decree nisi.

5. The husband and wife reached agreement on all matters and entered into two consent summonses both dated the 29 July 2016, the first in relation to ancillary relief and the second in relation to the children. On the face of it these documents are reasonably straightforward. I am told that the wife received slightly less than 50% of the assets which included the former matrimonial home in Hong Kong. Both parties had worked throughout the marriage and each has been very successful. On the face of it this agreement is in line with current jurisprudence. Likewise, the children agreement records laudable sentiments with respect to the co-parenting relationship going forward and states inter alia as follows: …

On this basis it was agreed that the parties would have joint custody of the two children of the family, who are now aged 11 and 9, with care and control to the mother and reasonable access to the father, to include access on two out of every three weekends.

6. The decree nisi and orders in terms of each of these consent summonses were made orders of the court on the 20 September 2016.  Unfortunately, shortly thereafter, on the 25 September, matters fell apart when the husband found out that the wife had formed a relationship with a third party which was serious. It later transpired that the wife wished to relocate to Switzerland with the children in order to live with her new beau there. She has also secured a new job. In essence the husband says that if he had known of this that he would not have entered into the consent summonses on the terms agreed and that the wife was under a duty to disclose this fact to him. In his affirmation in support he says inter alia that he was misled and that material facts and information was not disclosed to him. He also accuses the wife of material non-disclosure and says that she has not been full and frank with him. Notwithstanding that he does not seek to set the financial order aside, nor does he seek to vary the arrangements for the children.

4.  The husband then sought, unsuccessfully for leave to appeal from the Court of Appeal itself. On the 20 October 2017 he subsequently issued a High Court Writ where he sought inter alia to set aside the ancillary relief order of the 20 September 2016 on the basis of “material non-disclosure and/or misrepresentation”. About a year or so before this, on the 31 October 2016, the wife had issued, what was in effect, a summons seeking to enforce the terms of the ancillary relief order i.e. she asked for an order for the transfer of property B and the transfer of a number of shares. The husband also sought to restrain the wife from pursuing such action in the writ. On the 3 November 2017 the parties agreed by consent as follows:

C. AND UPON the Respondent undertaking not to enter, occupy or reside in the property located at ABC (“the B Road property”).

D. AND UPON the Petitioner undertaking that except for her and the children’s personal belongings, all the chattels are to remain in the B Road property pending the determination of the High Court writ proceedings in HCA 2431/2017 or unless previously agreed or the 21^st January 2018 whichever shall first occur, or further order.

BY CONSENT IT IS HEREBY ORDERED THAT:-

1. The application is adjourned sine die to be determined if need be after the determination of the High Court action HCA 2431/2017 or until further order.

2. Costs be reserved to the Judge hearing the High Court action HCA 2431/2017.

The wife filed her Defence and Counterclaim on the 19 January 2018.

5.  In addition, the parties were also at loggerheads over the future arrangements for the children. In October 2017 the parties returned to the Family Court on cross applications, the wife having issued a summons on the 7 March 2017 seeking to relocate to Switzerland with the two children of the family and the husband having issued a summons on the 10 May 2017 seeking inter alia the sole care and control of the children. An agreement was eventually reached save for 4 discreet points. The court handed down a short Ruling with respect to those 4 discreet points on the 25 October 2017 and a supplemental order was made on the 26 October 2017. This is now the governing order with respect to the children.

6.  On the 1 December 2017 I handed down a further Ruling with respect to the costs arising out of these cross applications. In summary I made an order that there be no order as to costs save for a number of additional applications where I ordered that costs should follow the event in the normal way. I also referred to my short Ruling of the 25 October, which I had reproduced in full in the body of the Costs Ruling.

7.  On the 26 March 2018 it was further ordered that the wife’s undertaking, as set in the order of the 3 November 2017 (see paragraph 4 above), should be extended until the date of this hearing, or until further order, whichever occurred first.

8.  The other point to note is that the decree absolute was pronounced on the 15 November 2017.

Discussion

9.  I should say at the outset, and for reasons that I will set below, that it seems to me that the court does retain jurisdiction in this matter, although clearly this is not an exclusive jurisdiction. There is also an issue over the extent to which that jurisdiction should be exercised, given the concurrent high court proceedings.

The ancillary relief order dated the 20 September 2016

10.  It is common ground that the wife has complied with her undertakings contained in the court order but the husband has not. It is also common ground that the intention was that there should be a clean break between the parties with the husband receiving slightly more than 50% of the assets and the wife receiving slightly less. The order includes the standard clauses that one might expect in a clean break order of this type including the acknowledgment that each party is deemed to have made an application for ancillary relief (because logically one cannot dismiss something that has not been applied for – see paragraph A) and an acknowledgment that the agreement is in full and final settlement of each parties claims for all forms of ancillary relief (see paragraph C).

11.  In addition, the wife undertook inter alia as follows:

L. AND UPON the Petitioner undertaking to the Court and to the Respondent (1) to pay the mortgage in favour of ABC Bank (Hong Kong) Limited having Memorial No. CDE dated FGH 2009 in respect of the property located at B Road property with effect from 1^st May 2016 and (2) to repay to the Respondent within 56 days of the date of the Consent Summons US$60,000 in respect of all mortgage and living expenses payments made by him on behalf of the Petitioner from 18^th April 2016 to 19^th July 2016.

12.  And the husband undertook inter alia as follows:

Q. AND UPON the Respondent undertaking to transfer to the Petitioner all his legal and beneficial interest in the property located at B Road property subject to the mortgage in favour of ABC Bank (Hong Kong) Limited (“ABC”) having Memorial No. CDE dated FGH in the sum of X (“ABC Mortgage”) within 56 days of receipt of (1) ABC written consent to release the Respondent unconditionally from ABC’s Mortgage and a deed of indemnity to the Respondent from the Petitioner for all monies owing to ABC in respect of ABC’s mortgage or (2) Notice of discharge of the ABC Mortgage by the Petitioner and the costs associated with such transfer including but not limited to stamp duty shall be paid by the Petitioner.

R. AND UPON the Respondent undertaking to transfer within 56 days of the date of the Consent Summons to the Petitioner all his shareholding in XYZ Limited, a British Virgin Islands Company (“XYZ”) after payment by XYZ to the Respondent within 56 days of the signing of the Consent Summons 56% of the net proceeds of the liquidation of the account T Investments held by XYZ, which the Petitioner and the Respondent undertake to liquidate as soon as possible.

13.  It was on the basis that these undertakings (and others) had been complied with that the following order for dismissal was made:

THE JUDGE BY CONSENT ORDERED that:-

1. Upon the pronouncement of the Decree Absolute herein, the Petitioner’s claims against the Respondent and/or his estate for maintenance pending suit, periodical payments, secured periodical payments, lump sum provision, property transfer order, variation of settlement order and property adjustment provisions be dismissed;

2. Upon the pronouncement of the Decree Absolute herein, the Respondent’s claims against the Petitioner and/or her estate for maintenance pending suit, periodical payments, secured periodical payments, lump sum provision, property transfer order, variation of settlement order and property adjustment provisions be dismissed;

3. There be liberty to apply as to the implementation of the terms of this Order; and

4. There be no order as to costs in respect of all the negotiations in respect of the Consent Summons and the divorce suit and these ancillary proceedings.

14.  There was also a detailed agreement and undertakings concerning the financial support of the children. As I understand it, it is the wife’s case that these agreements and undertakings have also not been complied with by the husband. 

Dismissal of claims

15.  It is now argued by the husband, that because the decree absolute has been pronounced, that it follows that there has been a dismissal of claims and therefore this court can no longer retain jurisdiction over the matter, save for issues pertaining to implementation/enforcement. Putting to one side for the moment the fact that it seems to me that the summons of the 8 February 2018 is concerned with both implementation and enforcement, the other point of note is that the dismissal order was made on the premise that there had been full compliance with the undertakings as set out in that order. The dismissal is conditional upon those undertakings having been complied with. It is not something on its own. In this instance it is clear that the undertakings have not been complied with.

The court’s own orders

16.  I further accept, as argued by Mr Todd for the wife, that it cannot be seriously argued that the court does not retain jurisdiction over its own orders, even when there are proceedings afoot in a superior court. 

Liberty to apply

17.  In addition there is also an order giving liberty to apply as to the implementation of the terms of the order. It follows that the wife must have the jurisdiction to issue a further summons with a view to doing just that. As I have indicated above it seems to me that the summons of the 8 February 2018 is largely concerned with implementation and enforcement.

The undertaking of the 3 November 2017

18.  Mr Coleman also argues, that given that the only way for the husband to proceed is by issuing a writ in the High Court and given that the parties agreed by consent on the 3 November 2016 to adjourn the wife’s first summons seeking to transfer the B property to her, that it follows that the wife is barred from making any further application in the Family Court pending the outcome of the High Court proceedings. With respect I do not agree. Although the court may be limited in what it can or should do, nevertheless it does not follow that it simply does not have the jurisdiction to entertain the wife’s summons at all. In any event the wife’s undertaking came to an end on the date of this hearing.

Undertakings generally

19.  In so far as undertakings generally are concerned, it is not disputed that the court cannot impose an undertaking on a party nor can it vary an undertaking of its own motion. The court can accept an undertaking; it can discharge an undertaking and it can, in some circumstances and depending on the wording of the undertaking, refuse to accept or to discharge an undertaking. In this instance it has already been noted that the wife’s undertaking, as contained in Recital D of the court order dated the 3 November 2017, came to an end on the day of the hearing by virtue of the court order dated the 26 March 2018. It is accepted that undertakings are always variable. It follows that the court must retain jurisdiction to deal with the issue of the undertaking and that it is possible for the court to accept a new undertaking from the wife, or indeed the husband.

Variation

20.  It is not possible for an order for the transfer of a property to be varied (see section 11 Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO)). It is possible for an order for sale to be made once there is an order for transfer in place. This is not withstanding the existence or otherwise of a dismissal of claims. In this instance the husband undertook to transfer the former matrimonial home to the wife, presumably because they both wished for all of the financial agreements to be effected prior to the pronouncement of the decree absolute. In such circumstances, and as discussed during the hearing, it seems to me that there may be an argument concerning the husband’s undertaking and whether or not it is possible for the parties to rely on the order for sale provisions in section 11 of the MPPO.     

Discovery

21.  In so far as ongoing discovery is concerned, I accept that theoretically it is possible for a party to ask for further discovery where a court order has not been complied with. I also accept that in the circumstances of this particular case, that there may be some overlapping between the wife’s summons of the 8 February 2018 and her Counterclaim in the High Court action.

Conclusion

22.  In conclusion then the court is of the view that it does have the jurisdiction to hear substantive argument on the wife’s summons dated the 8 February 2018. This matter shall be set down with half day reserved in consultation with counsel’s diaries.

Costs      

23.  Costs of this discreet point, namely the costs of and occasioned by the hearing of the 21 September 2018, shall be to the Petitioner wife, to be taxed on a party and party basis if not agreed.