M v. C

FCMC 8147 / 2014

[2021] HKFC 219

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 8147 OF 2014

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J U D G M E N T
(LEAVE TO APPEAL OUT OF TIME)

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1.  This is an application by the Petitioner wife (“Mother”) for leave to appeal against Order (3) in paragraph 175 of the judgment handed down on 4 December 2020 (“Judgment”).

2.  After a five-day trial about the applications :- (a) of the Respondent husband (“Father”) for variation of periodical payments downwards; (b) of the Mother for variation of periodical payments upwards; and (c) of the Mother for attachment of income order, in the Judgment, I ordered that all 3 applications be dismissed, with no order as to costs on a nisi basis.

3.  The Mother filed the Summons for leave to appeal on 19 February 2021 against Order (3) in paragraph 175 of the Judgment that “the Mother’s application for attachment of income order be dismissed”. The Mother filed the affidavit on the same date explaining the reasons why the application was made out of time. The “Draft Grounds of Appeal” (“Draft Grounds”) and the “Written Statement Submission” were also filed on the same date.

4.  The Court had given directions in relation to the proceedings of the case, including the filing of affirmations or submissions in opposition, and that the application is to be dealt with by way of paper disposal.

5.  The Father opposed to the application, and he filed an affidavit on 7 April 2021, opposing to the Mother’s application.

6.  I refer to the background of the case which I had set out in paragraphs 3 to 32, 42 and 45 of the Judgment. The Order dated 26 August 2014 by consent (“2014 Order”) about the overall settlement of Children matters and ancillary relief issues is the order the parties are applying for variation, with the major terms included in paragraphs 8 and 9 of the Judgment. This ruling has to be read together with the Judgment. I shall adopt the same abbreviations as in the Judgment, unless otherwise specified.

The legal principles

7.  The legal principles governing applications for leave to appeal from the District Court is provided in section 63A(2) of the District Court Ordinance, Cap. 336:-

“Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

8.  The court has a discretion to grant leave to appeal out of time. The factors for consideration are :-

(a)  The length of delay;

(b)  The reason(s) for delay;

(c)  Prospect of success of the intended appeal application

(d)  Whether the grant of leave to appeal out of time would cause prejudice to the opposite party.

(See: LSW v LMYM, HCMP 1085/2006; 黃 對 潘 HCMP 2749/2014)

The Mother’s proposed grounds of appeal

9.  There are 5 draft grounds of appeal of the Mother, which are recited as follows :-

“(1) The Judge erred in the consideration of ‘reasonable excuse’ of default of the Father

(2) Judgment erred in believing that the Father will make full and punctual payment

(3) The Judge erred in not considering the risk of the payer in dissipating his property

(4) The Judge erred in dismissing AIO application based on the Father’s ‘background’

(5) The Judge dismissed the AIO application without considering the application to government and Miscellaneous Amendments Bill 2007 (Order against wages paid by the Government)”

10.  Under some of the 5 draft grounds of appeal, there are some sub-paragraphs explaining further each of the draft grounds of appeal.

Discussion

Application made out of time

11.  It is not in dispute that the Mother took out this application for leave to appeal out of time. The Judgment was delivered on 4 December 2020, with the Mother taking out this application on 19 February 2021, which was out of time for slightly more than one month.

12.  In the Mother’s affidavit filed on 19 February 2021, she explained the reasons why the application was made out of time, including the need to clarify with her lawyer her legal position upon the Judgment and ruling, and asking for clarification.

13.  I notice that the length of delay is not long. The Mother was represented by solicitors during the trial. She filed a notice to act in person on 4 December 2020, and since then, she started to act in person again. I am of the view that the delay is not long and the reasons are acceptable. Further, I do not see any substantial prejudice caused to the Father with the application made out of time for slightly more than one month.

14.  Even if the delay and reasons of delay is accepted, it is more important to consider the prospect of success of the intended appeal application. So I will now turn to the prospect of success of the intended appeal and the grounds put forward by the Mother.

15.  My ruling and reasons of the ruling for the application of attachment of income order is mainly contained in paragraphs 168 to 174 of the Judgment. But I have to emphasise that the ruling and reasons of ruling are interrelated to the background and analysis in the earlier parts of the Judgment.

16.  For the application of attachment of income order, I did not spell out and quote the ordinance involved, but I have considered the relevant sections in the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”), including sections 28(1), 28(1A) and 28(2B) of MPPO (refer to paragraph 168 of the Judgment).

17.  For clarify sake, I now set out the relevant sections of MPPO here:-

“28(1) Where a maintenance order has been made against a maintenance payer and—

(a)      (i) a court is satisfied that the payer has without reasonable excuse failed to make any payment which he is required to make by the maintenance order; or

(ii) a court is satisfied that there are reasonable grounds to believe that the payer will not make full and punctual payment in compliance with the maintenance order;

(iii) ……

(b) there is any income capable of being attached payable to the payer,

the court may, in accordance with rules made for the purpose of subsection (6), order the income to be attached as to the whole or part of the amount payable under the maintenance order and the amount attached to be paid to the specified payee.

(1A) For the purpose of subsection (1)(a)(ii), in deciding whether there are reasonable grounds to believe that the maintenance payer will not make full and punctual payment in compliance with the maintenance order, the court shall take into account all the circumstances of the case, including (but not limited to)—

(a) the payer’s past record and conduct in discharging his reasonable financial obligation towards the designated payee before any maintenance order is made;

(b) the payer’s past record and conduct in connection with the making of maintenance payments to the payee pursuant to the maintenance order or an undertaking in any proceedings; and

(c) the risk of the payer dissipating his property.

(2B) An attachment order may be made by the court on its own motion or on the application by the maintenance payer or the designated payee or both”

(1) The Judge erred in the consideration of ‘reasonable excuse’ of default of the Father

18.  Under this draft ground, the Mother is of the view that I erred in the consideration of whether the Father had, “without any reasonable excuse failed to make any payment” (see paragraph 6 of the Draft Grounds). The Mother had further elaborated under different sub-headings, including :-

(a)  Defaulted in payment while owning 9 properties

(b)  Defaulted in payment while stable high income unchanged

(c)  Father’s self-explained excuse wrongly accepted as reasonable excuse by the Judge

19.  I am well aware of the background of this case, including at the material times, the Father owns 9 properties (refer to paragraph 65 of the Judgment) and with a high stable income (refer to paragraph 70 of the Judgment).

20.  There are a few points I have to point out :-

(a)  In relation to the 9 properties of the Husband, only 1 property is in Hong Kong, 3 are in the mainland and 5 are in Thailand, with the value varies and were purchased within a short period of time (see paragraph 141 of the Judgment).

(b)  There was unilateral reduction of the total amount of periodical payments, but it is not the case of failure to make any payment at all. There was continuous payment, but in a much reduced amount (see paragraph 16 of the Judgment).

(c)  After consideration of all the evidence, I accept that the liabilities of the Husband are actual debts (refer to paragraph 162(c) of the Judgment) and I accept that the Father had incurred his financial debts and liabilities, leading to his disposable income having decreased to an extent that made him unable to comply with the 2014 Order (refer to paragraph 171 of the Judgment).

21.  Explanation had been given by the Father, including the reasons of obtaining loans to purchase those properties overseas, as he tried to earn more money through investment in properties (see paragraph 29 of the Judgment). Having considered the Father’s explanation, I did rule that the financial difficulties of the Father were self-induced, not caused by the Mother or by the 2014 Order. I am of the view that the Mother and the Children should not be responsible for the loss in investment and the liabilities incurred therefrom. I rule that with the re-arrangement of some of the 9 properties of the Husband, such as re-selling some of them, some of the corresponding financial liabilities as alleged will be gone (see paragraph 146 and 162(c) and (g) of the Judgment).

22.  Further, the Father explained that he had to pass the checking conducted on civil servants (refer to paragraph 30 of the Judgment), and any attachment of income may affect his work and possible promotion, which in turn would jeopardise the interest of the Children, if his work and income will be so affected (see paragraph 170 of the Judgment).

23.  The Father also confirmed with the Court that he undertook to pay whatever amounts to be ordered by the Court as reasonable sums, and if in default in future, he will not oppose to any application for attachment of income order (see paragraph 173 of the Judgment).

24.  Considering all the relevant circumstances and the evidence as a whole, I am not satisfied that the Father has without reasonable excuse failed to make the full payment.

(2) Judgment erred in believing that the Father will make full and punctual payment

25.  Under this draft ground, the Mother is of the view that the Judge had erred in “making ruling while neglecting to point out the following undisputed past record and conducts of the [Father] as under the relevant MPPO in the default” (paragraph 8 of the Draft Grounds), including :-

(a)  The Father’s conduct of default

(b)  The Father’s long past record of default for 25 months

(c)  The Father’s conduct until the end of trial

26.  I am aware of and have considered the matters as suggested by the Mother. The Father’s default in full payment and when the default started is stated in paragraph 16 of the Judgment. The Father’s conduct until the end of trial, including his stance as stated in his submissions had also been considered.

27.  I have to point out that there are various allegations between the parties and numerous matter involved. It is impracticable, if not impossible, to include each and every allegation of the parties against each other. Even if not expressly spelt out, I did consider the parties’ conduct and behaviour (see paragraphs 155 and 158 of the Judgment), including the conduct of the Father.

28.  In addition, I repeat paragraphs 19 to 24 above. It is with the consideration of all the relevant circumstances of the case and the evidence as a whole that I am satisfied that there are reasonable grounds to believe that the Father will make full and punctual payment in future.

(3) The Judge erred in not considering the risk of the payer in dissipating his property

29.  In the Judgment, there is no separate paragraph considering “the risk of the payer in dissipating his property”. However, in the consideration of whether I am satisfied that there are reasonable grounds to believe that the Father will not make full and punctual payment, I have considered all the circumstances of the case. Given the background of the parties, in particular the work and job nature of the Father, being a civil servant working for the government for more than 20 years with a pension, I do not see the need to analyse and spell out expressly such risk of dissipating his property in the Judgment.

(4) The Judge erred in dismissing AIO application based on the Father’s ‘background’

30.  Under this ground, the Mother further submitted the following (paragraphs 11 to 13 of the Draft Grounds) :-

(a)  To rule base on the “background” of a party is just wrong

(b)  Ruling is plainly wrong when the same “background” has defaulted in payment for already 2 years in the past

31.  I did not rule based solely on the Father’s background, and the background of the Father with default of full payment had been considered. I have to stress that background is one of the considerations, but I have also considered all the circumstances of the case and all the evidence before ruling that the application for attachment of income be dismissed. I have explained the ruling and the line of reasoning in paragraphs 169 to 174 of the Judgment. I also repeat paragraphs 19 to 24 above.

(5) The Judge dismissed the AIO application without considering the Application to Government and Miscellaneous Amendments Bill 2007 (Order against wages paid by the Government)

32.  In the Judgment, I did not refer to the Application to Government and Miscellaneous Amendments Bill 2007 (Order against wages paid by the Government) as suggested by the Mother. However, I did consider all the relevant sections in MPPO and all the evidence of the case before ruling. Paragraphs 169 to 174 of the Judgment are repeated.

Conclusion and order

33.  There are other points raised by the Mother under the section of “Situation Update” (paragraph 17 of the Draft Grounds), namely “[Father] Continues Default in Payment and Declared Refusal to Pay in Full and Punctual”. The Mother explained that the reality shows that what the Judge believed and ruled in the Judgment about the Father will make payment in full and punctual is plainly wrong, as the Father continues to default in making full and punctual payment.

34.  I have to point out that any such matters are post Judgment. Further, I explained in the Judgment that :-

(a)  I accept that the Father had incurred his financial debts and liabilities, leading to his disposable income having decreased to an extent that made him unable to comply with the 2014 Order (paragraph 171 of the Judgment);

(b)  The amount and extent of his debts had been explained and considered :-

(i)  in paragraphs 119 and 120 for mortgage payments;

(ii)  in paragraphs 127 and 128 for repayment of loans to banks; and

(iii)  in paragraphs 80 to 82 for loans from his sister.

(c)  However, I have also ruled that I am not convinced that the Mother and the Children should be held responsible, as I am of the view that the financial difficulties were self-induced (paragraph 162(c) and (g) of the Judgment); and

(d)  I further rule that the Father has the ability to pay for any reasonable sums to be ordered by the Court (paragraph 162(d) of the Judgment).

35.  More importantly, my ruling has to be read in context. I stated in paragraph 174 of the Judgment that “After my ruling, the Father should be making arrangements, including considering selling or re-arranging some of this properties, and he would be able to pay for the amounts ordered by the Court, including the outstanding amounts of maintenance.” In other words, reasonable time has to be given to the Father to sell or to dispose of some of his properties.

36.  It is under this context and with the Father’s confirmation that I include in paragraph 173 of the Judgment that I further rule in paragraph 174 that “In the event that there is any payment of monthly maintenance in default in future, there should be no hesitation from the Court to order attachment of income.”

37.  As a passing remark, the Father, in his affidavit in opposition, attached some documents, and he explained in the content of his affidavit that he submitted those documents for the court to consider “to allow [him] to submit this new piece of evidence for the case given it is relevant to my previous submissions”. It is not a proper application and it is neither appropriate nor necessary for the present application, and therefore I will not entertain the Father’s request.

38.  With all the reasons aforesaid, I am of the view that there is no reasonable prospect of success of the Mother’s application. Further, I am of the view that there are no other reasons in the interests of justice why leave to appeal should be granted. Therefore, the application for leave to appeal out of time must be dismissed and I so order.

Costs

39.  Generally, costs should follow the event. In view of the background of this case and the parties now act in person, together with the 3 applications in total arising from the Judgment taken out by the parties (this application, the application taken out by the Father for leave to appeal out of time and the application taken out by the Mother for varying the costs order nisi), I am of the view that there should be no order as to costs, including all costs reserved, for this application. This is a costs order nisi, which shall be made absolute within 14 days.