PMCL also known as LMC also known as KLMC v. AKK also known as KAK AND ANOTHER

FCMC 11521 / 2015

[2024] HKFC 125

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 11521 OF 2015

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__________________________

DECISION
(MPS, Stay of Proceedings)

__________________________

A.  The Applications

1.  Before this court are two Summonses (“Summonses”) issued by the 1^st Respondent husband (“R1”) against the Petitioner wife (“P”).

2.  The first one is a Summons dated 7 December 2023 (“MPS Summons”) for the following:

2.1.  Maintenance pending suit to R1

2.1.1.  at a monthly sum of HK$168,000 from 1 January 2024;

2.1.2.  a lump sum of over HK$19 million for maintenance pending suit from 1 January 2013 (which is before the petition); and

2.1.3.  a lump sum payment of over HK$10 million for R1’s 2024 medical insurance and medical expenses, expenses relating to the purchase of a car and renovation of the matrimonial home etc.

2.2.  Interim children maintenance be paid to R1

2.2.1.  at US$10,600 monthly for the Daughter[1] from 1 January 2024 onwards;

2.2.2.  a lump sum payment of US$150,000 for the purchase of cars for the Son[2] and the Daughter; and

2.2.3.  a lump sum payment of over HK$9.5 million as interim maintenance for the two adult children for the period from 1 January 2013 (which is before the petition).

2.3.  Legal costs provisions to R1

2.3.1.  at HK$360,000 per month from 1 June 2023; and

2.3.2.  a lump sum of HK$10.8 million as legal costs provisions from 4 September 2015.

2.4.  Security for payment.

3.  The second one is a Summons dated 28 December 2023 (“Stay Summons”) in gist for a stay of all proceedings in this action, except the MPS Summons, pending the final determination (including any appeal) of the MPS Summons.

4.  I directed these Summonses to be dealt with by paper disposal. This is my decision.

B.  Relevant facts and procedural history

5.  P is about 58 years old and R1 is about 62. They graduated from a university in the United States in 1988[3]. R1 further obtained his master’s degree in Chemistry Engineering in 1990[4]. They got married in 1990 and have two adult children. The elder son (“Son”) was born in 1998 and the younger daughter was born in 2000 (“Daughter”). P presented the petition in September 2015. Decree Nisi was pronounced in February 2016.

6.  In April 2021, pursuant to the order of HHJ Melloy, the parties have filed their section 7 narrative affirmations as evidence for their ancillary relief dispute.

7.  In October 2021, R1 took out 3 applications for the following reliefs:

7.1.  for a joinder of 6 intended respondents for determination of the beneficial ownership of 13 landed properties in Hong Kong and the Mainland (“Joinder Summons”);

7.2.  for leave to file a 3^rd Questionnaire (“Questionnaire Summons”); and

7.3.  for a section 18 declaration on the ground that the two children have attained majority and therefore no children to whom section 18 applies.

8.  After a 3-days hearing, by an order made on 13 February 2023, I dismissed the Joinder Summons, partly allowed the Questionnaire Summons, and made a section 18 declaration.[5]

9.  By an order dated 9 March 2023, R2 was joined as the second respondent for the determination of, inter alia, the beneficial ownership of the shares in SSEL (a family company) which R1 had transferred to her in July 2021 (“Preliminary Issue”)[6].

10.  On 18 August 2023, R1 took out a Summons seeking leave to apply ex-parte for a decree absolute (“DA Summons”).

11.  P did not oppose the DA Summons. On 9 November 2023, I granted leave to R1 to apply ex-parte for a decree absolute. R1 then lodged the application and the Decree Nisi was made absolute on 13 November 2023.

12.  Less than a month after the Decree Absolute was pronounced, R1 took out the MPS Summons on 7 December 2023.

13.  At the case management hearing on 22 December 2023, case management directions were made (“2023 CMH Order”). Below are the directions relevant to these applications:

13.1.  the trial of the parties’ ancillary relief dispute and the Preliminary Issue was fixed for 10 days commencing on 2 December 2024;

13.2.  a second case management hearing and a pre-trial review hearing were fixed for mid-August and early October 2024 respectively; and

13.3.  both parties do file and exchange an updated Form E on or before 2 February 2024.

14.  On 28 December 2023, R1 took out the Stay Summons.

15.  In breach of the 2023 CMH Order, R1 did not file an updated Form E. This resulted in an unless order made by this court on 7 May 2024[7], under which, unless R1 files and exchanges an updated Form E on or before 4 June 2024, R1’s MPS Summons stands dismissed.

16.  R1 filed the updated Form E on 4 June 2024.

17.  This court was informed that apart from the present dispute, R1 had commenced or caused to commence other litigation in Hong Kong and the Mainland disputing the ownership of certain properties of the parties. These actions include:

17.1.  A High Court action (“HC Action”) commenced by some family companies against P and her maiden family members. The statement of claims of the HC Action was verified by a statement of truth signed by R1.

17.2.  A recent action commenced by R1 in the Mainland against P in relation to certain properties in Guangzhou, which properties were part of the subject matters in these ancillary relief proceedings.

17.3.  A recent action commenced by R1 in the Mainland against a third party over certain property. That third party has applied to join P as a party to that action.

C.  MPS Summons

18.  Having considered the evidence and submissions, I dismissed the MPS Summons for the following reasons.

19.  Firstly, it is clearly outside the court’s power under section 3 of MPPO[8] to award maintenance pending suit for any time before the date of presentation of petition (i.e. 4 September 2015) and after the date of the determination of the suit, which is the date of the Decree Absolute (i.e. 13 November 2023).

20.  Section 3 of MPPO provides:

“either party to the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of the presentation of the petition … and ending on the date of the determination of the suit, as the court thinks reasonable.”

21.  Legal costs provision is part of maintenance pending suit: A v A (Maintenance Pending Suit: Provision of Legal Fees)[9]; LCYP v JEK[10].

22.  Secondly, although R1 has indicated in his Form 4 filed on 11 December 2015 that he wished to be heard on the issue of, inter alia, maintenance pending suit, he had not made any application in accordance with Rule 68 of the Matrimonial Causes Rule prior to the Decree Nisi being made absolute.

23.  Thirdly, after the pronouncement of Decree Absolute, it is too late to obtain a maintenance pending suit as there is no suit pending.

24.  The learned author of Rayden & Jackson on Relationship Breakdown, Finances and Children has cited M v M[11] as an authority and said:

“[11.72] After decree absolute in suits for … dissolution of marriage, … it is too late to obtain an award of maintenance pending suit, even upon an application presented and prosecuted with due diligence before the final decree, for there is then no suit pending”

25.  R1 had sought on his own volition leave to apply ex parte for a decree absolute. After he obtained the leave, he took out the application and a Decree Absolute was pronounced. All along, he had not made any application for maintenance pending suit nor made mention of his being or having been in any immediate reasonable needs that call for an award of maintenance pending suit.

26.  The authorities cited by R1 (namely: C v F[12]; HJFG v KCY[13]; Currey v Currey[14]; AD (aka AT) v RT[15]) do not assist his application.

27.  Fourthly, R1 failed to establish any reason that this court shall allow his claim for interim children maintenance.

28.  The children are now aged 25 and 24. The Son has been in gainful employment since about 2022[16].

29.  When R1 applied for a section 18 declaration in 2021, he offered in §29 of his 11^th Affirmation filed on 8 October 2021 an undertaking to take full financial responsibility for both children:

“For the best interest of the children, I am willing to undertake to take full financial responsibility for both of the Children and I believe the Petitioner will agree to this for the sake of the children. Therefore, I would humbly ask that a section 18 Declaration under the Matrimonial Proceedings and Property Ordinance be granted so that the parties could apply for the Decree Absolute.”

30.  In his application for a section 18 declaration, he relied on the ground that the two children have attained majority, hence there was no child of the family to whom section 18 applies. It was on this basis that a declaration under section 18(1)(a) of MPPO was made on 13 February 2023.

31.  In R1’s affirmation filed on 18 August 2023 in support of his DA Summons, he again confirmed that there was no child to whom section 18 of MPPO applies. He made no mention of any need nor intended claim for interim children maintenance.

32.  Furthermore, R1’s assertion that he is maintaining the adult children was not supported by any proof.

33.  Fifthly, in any event, the evidence before this court does not support the exercise of discretion in favour of allowing backdated payments or any sums claimed by R1. His financial situation was not as dire as he sought to portray.

33.1.  R1 had engaged 8 solicitors firms, senior and junior counsel to represent him at different stages of the proceedings.

33.2.  His updated Form E filed in June 2024 showed that he has assets of a value over HK$13 million.

33.3.  His claim of having incurred an indebtedness over HK$42.5 million (compared to HK$19.6 million in his 2020 Form E) was not particularised nor supported by proof. R1’s case of having incurred such huge debts demonstrated his ability to raise funds, thus negate any suggestion that he should be entitled to legal costs provisions under the Currey test.

33.4.  He is receiving rental income of various matrimonial properties.

33.5.  He is residing in the former matrimonial home which is mortgage free.

33.6.  He has not disclosed particulars about his inheritance from his mother who passed away in March 2023.

33.7.  He has resources to commence and continue various litigation in Hong Kong and Mainland against P and/or third parties.

33.8.  There is a lack of evidence on the expenses claimed in his updated Form E (general expenses of HK$81,300 and personal expenses of HK$266,200 including HK$90,000 for holiday/entertainment, HK$19,300 for household food and household expenses and HK$143,600 for children expenses) which are prima facie excessive.

34.  Sixthly, R1 has failed to establish any merits on his maintenance pending suit claims. There is no need to consider his claim for “guarantee” or “security”. In any event, he has not advanced any basis for this relief.

D.  Stay Summons

35.  The legal principles summarized by Au-Yeung J in Poon Ka Man Jason v Cheng Wai Tao & ors [17]are well established. A stay on case management ground should only be granted when there are “very good reasons” and in “rare and compelling circumstances”:

“36. The court has discretion, as a matter of case management, to grant a stay of proceedings generally or until a specified date or event: High Court Ordinance, Section 16(3); Order 1B, rule 1(2)(e) of the Rules of the High Court (“RHC”).

37. Where, as here, the action was commenced as of right, the court should only grant a stay when there are “very good reasons” and in “rare and compelling circumstances”. The stay must not cause injustice to the Plaintiff, and the Defendants must show that continuing the proceedings would be unjust to them. See: Zhang Xiuhong v Liu Wenchen & ors (HCA 2118/2012. 20 July 2017), §34, per Au-Yeung J, citing Ng J’s judgement in AIG Europe Ltd & ors v Fast-Link Express Ltd & ors (HCAJ 114/2014, 10 January 2017), §§9-13. The ultimate question is what would serve the ends of justice.

38. Exercise of discretion would involve balancing between (1) possible wastage of Court’s time and resources and also parties’ time and costs (if there is no stay) on the one hand and (2) possible delay of the proceedings for a short period of time (if there is a stay) on the other hand: see The Al Dhabiyyah [1999] 4 HKC 414 at p 420A-F.

39. The court must bear in mind that the underlying objectives of the court is to increase cost-effectiveness of court proceedings; ensure that a case is dealt with as expeditiously as is reasonably practicable; promote reasonable proportion and procedural economy in the conduct of the proceedings; and to facilitate settlement of disputes: Order 1A, rule 1(a), (b), (c) and (e) of the RHC.”

36.  R1 has not shown a “very good reason” nor “rare and compelling circumstances” that calls for a stay of these proceedings pending the determination of the MPS Summons.

37.  R1’s MPS Summons was dismissed for the reasons set out above.

38.  This divorce petition was presented in 2015. The parties have a duty to ensure that the case is dealt with as expeditiously as is reasonably practicable, and with a sense of reasonable proportion and procedural economy in the conduct of the proceedings: Order 1A rules 1 and 3, Rules of the High Court.

39.  The milestone dates, including PTR and Trial were fixed last year. A stay of proceedings will inevitably derail these milestone dates. There is no exceptional circumstance justifies a variation of the milestone dates: Order 25 rule 1B (3), Rules of the High Court.

40.  If there is any real financial needs that requires maintenance to R1, this will be heard and considered by the court at the ancillary relief trial in December 2024.

41.  The other arguments advanced by R1 are either misconceived, irrelevant or red-herring.

41.1.  R1 argued that as P has engaged her team of lawyers but he does not have the resources to do so, there is no equality of arms, and the due process has not been observed. He cited the decision of European Court of Human Rights in Airey v Ireland[18] and the Bill of Rights Ordinance. I repeat the facts set out in paragraph 33 above. R1 has not proved that he does not have the resources to engage lawyers. Notably, he had recently commenced or caused to commence other litigation in Hong Kong and the Mainland.

41.2.  R1 argued that trial is not the only way to settle a dispute. For the obvious reason, this argument is red-herring. There have been plenty of opportunities for the parties to explore settlement. R1 has not adduced any evidence to show that a stay will have a real practical effect on achieving settlement. The parties are free to explore settlement for their disputes without a stay in any event.

E.  Costs

42.  The legal principles for an award of costs are well established. There is no reason to depart from the starting point of costs follow the event. P is the successful party in these two applications. She is entitled to costs.

43.  I have directed the parties to lodge statement of costs and statement of objections for summary assessment of costs.

44.  P asked the court to take into account R1’s litigation misconduct, especially R1 has repeatedly acted in defiance of court orders and withheld documents from P notwithstanding court’s directions:

44.1.  R1 defied the 2023 CMH Order and failed to file and exchange an updated Form E within the stipulated time. This resulted in an unless order directing R1 to file and exchange his updated Form E on or before 4 June 2024. R1 waited until the deadline of 4 June 2024 to file his updated Form E. There was an inordinate and inexplicable delay of over 4 months.

44.2.  By orders dated 31 January 2024 and 7 May 2024, R1 was directed to lodge and serve submissions in support of his Stay Summons on or before 9 May 2024 and P was directed to lodge and serve submissions in opposition on or before 16 May 2024. Notwithstanding the above orders, R1 only emailed a 56-page document to P’s solicitors in the afternoon of 14 May 2024 despite he had lodged the submissions with the court in time on 9 May 2024.

44.3.  Similarly, by order dated 12 June 2024, R1 was directed to lodge and serve written submissions on the MPS Summons on or before 26 June 2024 and P was directed to lodge and serve hers on or before 10 July 2024. While R1’s written submissions were lodged into the court on 26 June 2024, he did not serve it on P in disregard of the court’s order, and waited until the night of 28 June 2024 to email his 18-page document to P’s solicitors.

45.  I agree with counsel for P that the court shall register its disapproval to the above unacceptable litigation misconduct. R1 acting in person is no excuse for repeatedly defying court orders and delaying service of his submissions to the other side thereby shortened the time that P’s side should have in preparing their submissions.

46.  The MPS Summons and the Stay Summons are totally unmeritorious.

47.  The amounts claimed by P in the statements of costs are reasonable and proportionate.

F.  Disposition

48.  By reasons of the above, I order that:

(1)  The MPS Summons and the Stay Summons be dismissed.

(2)  R1 do forthwith pay P the costs of the MPS Summons summarily assessed at HK$73,660.

(3)  R1 do forthwith pay P the costs of the Stay Summons summarily assessed at HK$65,800.

(4)  P do draw up, file and serve this order.