HMY v. CWCK

FCMC 6583/2018

[2019] HKFC 306

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 6583 OF 2018

----------------------------

----------------------------

__________________________

RULING

(Decree Absolute)

__________________________

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 27 March 2019 he states as follows:

1.  leave be granted to the Respondent for decree nisi pronounced against him on the 11^th day of October 2018 being made absolute; and

2.  Costs of and occasioned by this application be paid by the Petitioner to the Respondent.

The reason given for his application initially can be found in his affirmation in support dated the 20 May 2019 when he says inter alia as follows:

7.  However, after knowing that I suffered from stroke for the third time, without showing any sympathy on me at all, the Petitioner ruthlessly and deliberately delayed the obtaining of the Decree Absolute in these proceedings by using every possible excuse. Therefore, I verily believe that such delay on the part of the Petitioner is with ill-motive and hidden agenda.  Despite my solicitors had requested the Petitioner’s solicitors to apply for Decree Absolute, the Petitioner still fails and refuses to do so.

Background

2.  The factual background to the case has been helpfully set out in Mr Yim’s written submission. Mr Yim appears on behalf of the Petitioner wife. He states as follows:

B. Factual background

10. H and W (both currently 73 years old) married in Hong Kong on XX January 1973.

11. H and W had two children out of this marriage, a son born on XX March 1976 and a daughter born on XX January 1978 (“Children”). The Children are now adults and self-supporting.

12. H is a medical doctor by occupation. W has been a housewife since marriage save for a few years when she worked as a saleslady for additional income for the family [W’s Form E/§5.2].

13. After marriage, H and W lived with their 2 children and H’s mother (who is now 90 years old) at the former matrimonial home known as Flat A, 11/F, TTM, Nos X & XX SS Street, Kowloon (“TTM”) [H’s 3^rd Aff/§31].

14. In May 1988, H purchased another property known as Flat A, 19/F, SG, No XXX SS Street, Kowloon (“SG”) in the name of a property-holding company, namely TK Enterprises (“TK”)[W’s Aff/§21].

15. In 1990, H moved away from TTM to cohabit with his girlfriend (“Ms. W” [His 3^rd Aff/§21].

16. There can be no dispute that after 1990, W continued to look after the Children as well as H’s mother such that H could develop his medical practice and pursue his relationship with Ms. W.

17. There is also no dispute that after 1990, H would still return to TTM regularly to visit the Children and his mother [H’s 3^rd Aff/§7], and continued to support the living expenses of W, the Children and H’s mother until 2014 [H’s 3^rd Aff/§7] & [H’s 2^nd Aff/§13].

18. On 16 June 1993, H purchased clinic premises known as Office Units A and B on XXXX Floor, No XXX N Road, Kowloon (“Clinics”) in his sole name [H’s 2^nd Aff/§19].

19. H suffered from 3 strokes in August 2014, January 2018 and 16 October 2018 respectively [H’s 2^nd Aff/§§23-24].

20. It is W’s case that the relationship of the parties began to deteriorate after H’s first stroke [W’s Aff/§6].  H no longer visited TTM Property and the parties were unable to get in touch like before as Ms. W took over many affairs on behalf of H [W’s Aff/§6].  

21. In 2018, H proposed to sell the TTM and asked his mother (and in effect, W) to change to a smaller residence but H’s mother rejected H’s demand [H’s 3rd Aff/§§17-18].

22. On 8 June 2018, H even issued a demand letter against his mother requesting for the return of the title deeds of TTM and threatening to commence legal proceedings against her [W’s Aff/§7 & HWY-l] & [H’s 3^rd Aff/§§19 & 22].

23. Around the same time, Ms. W also asked for the return of the title deeds of a property in Dongguan, PRC (“Dongguan Property”)[H’s Aff/§8].

24. In 2018, H also stopped all maintenance to W and H’s mother [H’s 2^nd Aff/§12] & [W’s Form E/§5.5].

25. It was against such background that W had no choice but to petition for divorce to protect her interest [W’s Aff/§9].

3.  It is of note that although these are the basic facts, there is clearly a difference of emphasise between the parties with respect to some of them, which I do not intend to go into in any detail here. Suffice it to say that regardless of whether or not this might initially have been termed as “an amicable separation”, in reality the parties have been separated for a very long period of time and during those intervening years the husband has established a second family. The relationship has also clearly soured following the husband’s first stroke and the issuance of the divorce petition.         

The divorce     

4.  The wife issued divorce proceedings on the 28 May 2018 based on two year’s separation. In that petition she said that the parties had been separated since on or about 1987. The decree nisi was subsequently granted on the 11 October 2018. 

The law

5.  Section 17(2) 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.

This then will be the test that is applied here.

The issue

7.  Thus there is only one issue to be determined in this case, namely whether or not there is a real risk of financial prejudice to the wife, if the decree absolute is granted?

The wife’s case

8.  It would seem that the answer to that question must be “yes”. In the wife’s affirmation dated the 2 September 2019 she identifies three different areas where she might suffer significant financial prejudice in the event that a decree absolute is granted. These are

(a)  The husband would lose any incentive to proceed with the ancillary relief matter expeditiously, in circumstances where he has already demonstrated a certain reluctance to do so;

(b)  The wife may suffer significant prejudice in the unfortunate event that the husband passes away before the ancillary relief matter is concluded and she is left with no alternative but to make an application under section 3 of the Inheritance (Provision for Family and Dependents) Ordinance, Cap 481.

(c)  The wife would lose the right to apply for maintenance pending suit/litigation funding;

9.  The wife elaborates on the predicament that she could potentially find herself in, in her affirmation dated the 2 September 2019 where she states as follows:

20. Given the highly uncooperative attitude demonstrated by the Respondent in these proceedings, I have been advised by my solicitors and verily believe that if the decree absolute is granted, it is likely that the Respondent will lose all the incentives to proceed expeditiously with these proceedings and will continue to stall my claim for ancillary relief whilst continuing to dissipate or dispose of the assets under his control. That will cause me real financial prejudice.

21. As can be seen from the court documents presently available, the registered owner of SG is TK Enterprises Ltd (“TK”), a limited company registered in Hong Kong with Ms. W as the sole shareholder. However, according to company search records, the Respondent and Ms. W purchased the shares of TK in May 1988 (thus acquiring SG), I verily with the Respondent holding 950 shares and Ms. W hold only 50 shares at that time. In or about 1988, the Respondent told me that he had purchased SG and that he would be moving out. At that time he did not tell me that he purchased the property through acquiring the shares of TK. Bearing in mind that Ms. W was at a very young age at that time and given that the Respondent was the majority shareholder at the time of acquisition and that the Respondent told me face to face that he had purchased SG, I verily believe that the consideration was paid by the Respondent using our family assets. I am advised and verily believe that this property should be regarded as part of the family assets between the Respondent and me. If this case does not settle (which is likely, given the Respondent’s attitude) and has to proceed further, I have been advised and verily believe that I will have to apply to join TK as a party to these proceedings for the purposes of determining the beneficial ownership of SG.

22. The Respondent suffered 3 strokes since 2014. His counsel submitted to the Court on 11^th June 2019 that mediation was not suitable due to the Respondent’s health condition.  As stated above, mediation did eventually take place on 12 August 2019. In the unfortunate event that the Respondent passes away before determination of ancillary relief, something which I do not wish to see, I am advised by my solicitors and verily believe that the granting of Decree Absolute would deprive me of the rights to seek my financial entitlement under the family law regime.  In such an event, I will no longer be a spouse of the Respondent and will be left with nothing under the law of intestacy. Depending on whether the Respondent has made any will and the contents of any such will, the only remedy available to me will be confined to a dependent’s claim under the Inheritance (Provision for Family & Dependents) Ordinance, Cap 481 (“I(PED)O”). I have been advised and verily believe that the position of a former spouse under the I(PED)O is likely to be less advantageous than my position under the divorce law regime.

23. In this connection, I have also been advised by my solicitors and verily believe that there is no provision under the I(PED)O to enable me to commence any application equivalent to TL v ML proceedings in relation to the beneficial ownership of SG or any avoidance application in relation to the aforementioned dispositions from the Respondent to Ms. W.

24. Lastly, as stated previously in these proceedings, the Respondent ceased to pay me any maintenance in about 2014. If this case does not settle and has to carry on, I may have to apply for maintenance pending suit from the Respondent in order to restore some degree of financial support from him in the interim. I have also been advised by my solicitors and verily believe that once a decree absolute is granted, I will be disentitled from applying for maintenance pending suit under section 3 of the Matrimonial Proceedings and Property Ordinance, Cap 192. I verily believe that this may also be the reason why the Respondent is pushing for the granting of the decree absolute.

10.  In general, I accept all of the wife’s concerns as set out above. It is also of note that the husband has not sought to allay any of the wife’s fears by offering any form of undertaking – financial or otherwise. To that end I should add that I do not accept the suggestion that it is for the wife to request an undertaking. It seems to me, that it is for the husband to propose an undertaking and for the wife to then consider whether or not she should accept it. It is trite but worth reiterating that the court cannot impose an undertaking. 

11.  Counsel for the husband argues that given the fact that the husband is based in Hong Kong and most of his assets are also in the territory and the wife has filed a lien against them in any event, there can be little risk to her if a decree absolute is granted. However, this fails to address the legal reality the wife may face in the event that a decree absolute is granted. I accept, for example, that she would not be able to apply for maintenance pending suit and/or litigation funding in the event that a decree is granted. This could cause her some prejudice, although I also accept that she may be unlikely to issue such an application in any event given that she has some liquid assets at her disposal. But the point is that she should not be precluded from this as a possibility in circumstances where the ancillary relief proceedings may drag on for a long period of time. In such circumstances it seems to me that it matters not if the assets are secured. This will not assist her with interim financial provision.

12.  Further I accept the wife’s concerns with respect to any potential proceeding under the Inheritance (Provision for Family and Dependants) Ordinance, Cap 481.  It would not be possible in such circumstances to join Ms W or to make a claim against the “TK” property.  I also accept that there may be an argument that the wife was not financially supported by the husband immediately before his death, given that he has failed to support her for some time.          

13.  It is also clear that the husband has not proceeded with the ancillary relief matter expeditiously. Mr Yim sets out the wife’s position on this in paragraphs 57 and 58 of his submission where he says that:

57. In this connection, it must be noted that throughout these proceedings, H has caused unnecessary delays and disruptions on a number of occasions:-

(1)  As noted above, the affirmation in support for the current application was filed 54 days after H’s Summons, and after a letter of demand had been sent from Hastings;

(2)  H requested time extension to file his 1^st Answer (deadline 17 April 2019) only after the deadline (pursuant to the Order dated 6 March 2019) has passed and that W’s solicitors had written to demanding the same;

(3)  H’s 2^nd Answer was subsequently filed on 2 May 2019, 15 days after the original date;

(4)  H was ordered to file and serve his 2^nd Answer by 5 August 2019. 4 weeks have lapsed before W’s solicitors wrote to H’s solicitors on 2 September 2019 demanding the same to be served before 4 September 2019;

(5)  On 3 September 2019, H's solicitors requested the deadline be extended to 18 September 2019 with no given reason; H’s solicitors failed to respond to W’s reply on 4 September 2019;

(6)  On 20 September 2019, H’s solicitors requested another extension to 26 September 2019; and

(7)  H’s 2^nd Answer was filed on 26 September 2019, 52 days late from the original date.

58. W also faced numerous difficulties when she tried to facilitate mediation between the parties:-

(1)  W had instructed her solicitors to explore settlement options in October 2018 [W’s Aff/§12] but was refused by H whom even suggested that such proposal for mediation was “pre-mature and not appropriate” [W’s Aff/HMY-2];

(2)  Mediation was indeed first initiated by H in his letter dated 18 July 2018;

(3)  It was until the 2^nd hearing of the First Appointment Hearing on 21 June 2019 that H agreed to attempt mediation. On 3 July 2019, parties agreed on the mediator;

(4)  On 3 July 2019, H’s solicitors proposed to sell the clinics [Letters between the solicitors dated 27 June and 3 July 2019];

(5)  By letters dated 5 July 2019 and 9 July 2019, W’s solicitors updated H on the mediation arrangement as well as requested for time extension to file W’s 1^st affirmation with a view to save costs should mediation be successful [Letters from W’s solicitors to H’s solicitors dated 5 and 9 July 2019];

(6)  H’s solicitors waited for 10 days before objecting to W’s time extension request with no reason given.  W’s solicitors therefore had to take out and serve a Summons for time extension on 16 July 2019;

(7)  10 days after the said Summons, on 26 July 2019, H’s solicitors reverted to say that they no longer object to W’s application for time [Letters from W’s solicitors to H’s solicitors dated 15 to 29 July 2019]; and

(8)  On 12 August 2019, the parties attended mediation but was unsuccessful. W was prepared to return to the mediation to resume another session by H failed to give proper responses to the mediator’s proposed arrangement [W’s Aff/§14].

Again, I accept what is said in these paragraphs.

Decision

14.  In such circumstances it seems to me that the wife has clearly shown that she is likely to suffer financial prejudice in the event that a decree absolute in granted at this juncture.

15.  Consequently, I shall dismiss the husband’s summons dated the 27 March 2019. I can see no reason why costs should not follow the event in the normal way. Thus there shall be an order nisi to be made absolute in 28 days’ time that the husband shall pay the wife’s costs of and occasioned by his summons dated the 27 March 2019, to be taxed on a party and party basis if not agreed. There shall be certificate for counsel.