屠 v. 李

FCMC 15826 /2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 15826 OF 2013

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D E C I S I O N

(Leave to appeal)

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Introduction

1.  This is the application taken out by the Petitioner (“the Husband”) for leave to appeal the Order of this Court dated 21 May 2014 (“the Order”) granted at the 1^st Appointment hearing.

2.  A chronology of the events leading up to the Order is set out below :

3.  As can be seen, the last document filed before the 1^st Appointment hearing on 21 May 2014 was the Notice of Change of Solicitors dated 15 May 2014.

The 2^nd Consent Summons dated 9 January 2014

4.  There are various undertakings and acknowledgment of the parties embodied in the preamble of this 2^nd Consent Summons which are not in issue.  The orders sought by the parties in the 2^nd Consent Summons are as follows :-

“IT IS ORDERED BY CONSENT THAT :-

1. The Consent Summons signed on 6^th November 2013 be withdrawn;

2. The marriage be dissolved on the ground of One Year Separation with Consent;

3. The joint custody of the children of the family, name 屠xx and屠xx, be granted to the Petitioner and the Respondent, with care and control under the Respondent with reasonable access to the Petitioner;

4. The Petitioner do pay to the Respondent the following two lump sum payments, namely :-

(1) the first lump sum payment of HK$6,000,000 by 60 equal monthly instalments of HK$100,000 (“the First Lump Sum”).

The first instalment payment of the First Lump Sum is to be made on the 3^rd day of the month after the making of this Order AND THAT each subsequent instalment of the First Lump Sum is to be paid on the 3^rd day of each succeeding month until full payment the said HK$6,000,000.

(2) the second lump sum payment of HK$12,000,000 by 120 equal monthly instalments of HK$100,000 (“the Second Lump Sum”).  The 1^st instalment of the Second Lump Sum is to be on the 3^rd day of the month immediately following the payment of the last instalment of the First Lump Sum  AND THAT  each subsequent instalment of the Second Lump Sum is to be paid on the 3^rd day of each succeeding month until full payment of the Second Lump Sum.  Provided that the Petitioner (or his estate) shall be released and discharged from the obligation to pay the Second Lump Sum or such remaining balance of the Second Lump Sum upon either : (a) the death of the Respondent; or (b) the Respondent’s remarriage, whichever is earlier.

5. This Agreement shall be the entire agreement for the full and final settlement of all claims that the parties have against each other.

6. There be an order for a declaration that the Court is satisfied that the requirements under section 18 of the Matrimonial Proceedings and Property Ordinance in relation to the welfare of the children born of the Petitioner and the Respondent are satisfied.

7. There be liberty to apply.

8. There be no order as to costs.”

The Order dated 21 May 2014

5.  The Order granted at the 1^st Appointment contained all the undertakings and acknowledgement embodied in the 2^nd Consent Summons and the ancillary reliefs sought save and except those words (as underlined above). Thus, with the preamble of undertakings and acknowledgement remain intact, the peremptory part of the Order reads as :-

“THE JUDGE ORDERED THAT :-

1. The Consent Summons signed on 6^th November 2013 be withdrawn;

2. The Petitioner do pay to the Respondent the following two lump sum payments, namely,

a. the first lump sum payment of HK$6,000,000 by 60 equal

monthly instalments of HK$100,000 (“the First Lump Sum”).

b. the second lump sum payment of HK$12,000,000 by 120 equal monthly instalments of HK$100,000 (“the Second Lump Sum”).

3. This Agreement shall be the entire agreement for the full and final settlement of all claims that the parties have against each other.

4. There be no order as to costs.”

6.  It just came to notice at this leave to appeal hearing that the perfected sealed copy of the Order contains the declaration under Section 18 of the Matrimonial Proceedings and Property Ordinance, Cap.192 which had not been granted at the 1^st Appointment hearing.  Thus leave is hereby granted for amendment by removing such declaration from the perfected Order for rectification.

The relevant provisions on leave to appeal

7.  The jurisdiction to grant leave to appeal rests with section 63A of the District Court Ordinance, Cap.336 which provides that leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or there are some other reasons in the interests of justice that the appeal should be heard.

8.  The relevant test for determining whether the appeal has a reasonable prospect of success is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal.  A reasonable prospect of success means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable” (see KNM v. HTF, HCMP No.288/2011 per Hartmann JA at paragraphs 8 and 9 of the Judgment).

9.  In the present application for leave to appeal, the Husband was represented by Counsel Mr. Jeremy Chan.  Application was sought under both limbs of section 63A of the Ordinance.  The Wife was represented by Counsel Mr. Felix Ng who had also appeared at the 1st Appointment hearing on 21 May 2014.  Submission was heard from Mr. Ng.

The Grounds of Appeal

10.  Counsel Mr. Jeremy Chan in his skeleton submissions elaborated the draft grounds of appeal (12 in total) by reference to 5 areas of “problems” arose from the terms of the Order.   There is also submission on the jurisdictional aspect by reference to the relevant provisions under the Matrimonial Proceedings and Property Ordinance, Cap.192 (the “MPPO”). 

11.  The 5 areas of “problems” are identified under the following headings :-

(a)  The Second Lump Sum – Death or Remarriage;

(b) Sequential/Consecutive Payment vs. Concurrent Payment;

(c)  The HK$6 million was for the Children, not the Wife;

(d) Section 18 Declaration;

(e)  Failure to Account for Past and Continuing Payments

12.  For the sake of completeness, the 12 grounds of appeal are set out below :-

“(1) The Deputy Judge ought to have adjourned the hearing on 21 May 2014 and ought not to have made a final order whether in terms of the purported consent summons or revised / amended or at all;

    (2) The purported consent summons was flawed and defective and ought not to have been approved whether at all or revised / amended;

(3) The purported consent summons did not properly and accurately embody and/or reflect the agreement between the parties;

(4) To the extent that the purported consent summons did embody and/or reflect some or part of the agreement between the parties and further and in any event, the order made does not embody and/or reflect the agreement between the parties nor even the purported consent summons and fundamentally altered the terms and conditions;

(5) The order made fundamentally departed from the parties’ agreement and/or purported consent summons, and the final   order as made ought not to have been made without either the parties’ express consent and agreement to the changes and/or after full discovery, disclosure, argument and upon final ancillary relief trial;

(6) The agreement between the parties was that HK$6 million is for the benefit of the Children and not the Wife personally and HK$12 million is for the benefit of the Wife personally.  The purported consent summons did not fully reflect this.  The distinction ought to have been clarified and so expressed. The order also did not reflect this.

(7) On the basis and by reason of the agreement that HK$6 million is for the benefit of the Children, the parties agreed that the Husband will not be liable for any further or other maintenance, that the Wife will be fully and solely responsible for the Children’s maintenance and expenses, that the Children had been fully provided for and that a Section 18 declaration ought to be granted [§ 6 of the purported consent summons].  If the Court was or is not satisfied that a Section 18 declaration ought to be granted or that these agreed terms and conditions were not acceptable by the Court, then one of the fundamental basis and premise of the parties’ agreement failed and no final order ought to have been made whether in the terms of the purported consent summons or revised / amended or at all.

(8) The HK$6 million payable by 60 equal monthly instalments of  HK$100,000 each was expressed to be payable in any event because it was for the benefit of the Children and not the Wife personally.  By contrast, the HK$12 million payable by 120 equal monthly instalments of HK$100,000 each was for the  benefit of the Wife personally, and was expressly agreed to cease upon the Wife’s death or her remarriage whichever is earlier;

(9) One of the fundamental basis and premise of the parties’ agreement was that the Husband would be relieved and discharged from paying the outstanding balance of the HK$12 million if the Wife should die or remarry.  If this agreed term and condition was not acceptable by the Court, then one of the fundamental basis and premise of the parties’ agreement failed and no final order ought to have been made whether in the terms of the purported consent summons or revised / amended or at all;

(10) Another of the fundamental basis and premise of the parties’ agreement was that the HK$12 million for the benefit of the Wife personally does not become payable unless and until the HK$6 million for the benefit of the Children had been paid in full.  This delayed commencement of payment of any part of the HK$12 million by at least 5 years (which was also subject to potential or possible release and discharge in the event of death or remarriage) and was of great advantage and benefit to the Husband and to which the Wife had agreed.  If this agreed term and condition was not acceptable by the Court, then one of the fundamental basis and premise of the parties’ agreement failed and no final order ought to have been made whether in the terms of the purported consent summons or revised / amended or at all;

(11); There was a failure to give credit for and/or take into account the HK$100,000 per month that the Husband had been paying since January 2014 and continued and continues to pay, which the parties had agreed would be taken into account and constitute part and parcel of the HK$6 million for the benefit of the Children and/or set off against the same;

(12) If and insofar as a formal application and/or affidavit or evidence in support was necessary, the Deputy Judge ought to have adjourned the hearing for the Husband to do so in the circumstances.”

13.  For this Decision, I will refer to each of these grounds of appeal by their numbers. 

Discussion

14.  As to the jurisdictional aspect, the contention was that although this Court, in terms of ‘power’ could have made the Order that was made, it should not have made it without conducting the normal and usual final ancillary relief trial for the reason that it had fundamentally departed from the parties’ agreement (Ground No.5).  It was submitted that there was simply no jurisdiction to make the Order (see paragraph 16 of Mr. Chan’s skeleton submissions).

15.  The proper question to be asked is whether the Court, when faced with a Consent Summons expressed in clear and unambiguous terms that it was intended to be a full and final settlement of the parties’ rights and reliefs against each other, and in particular as in the present case, duly drafted by lawyers and signed by the parties’ respective legal representatives, but somehow contain clauses or provisions which are in conflict with the statutory provisions, would be rendered ‘hands tight’ ?  Or, as Counsel Mr. Chan submitted, this Court should give the parties time and opportunity to resolve those conflicting clauses or provisions by adjourning the matter to a further hearing.  Or further, the Court could simply refuse to approve the 2^nd Consent Summons there and then.  It was submitted that what the Court should not do is to attempt to ‘rectify’ it. 

16.  First and foremost, we are under the post-CJR (Civil Justice Reform) era where the Courts shall (my emphasis) under Order 1A rule 2 seek to give effect to the underlying objectives of Order 1A rule 1, which are as follows :-

“Underlying objectives (O.1A, r.1) –

1. The underlying objectives of these rules are –

(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d) to ensure fairness between the parties;

(e) to facilitate the settlement of disputes; and

(f) to ensure that the resources of the Court are distributed fairly.”

17.  Besides, parties to legal proceedings and their legal representatives shall (my emphasis) assist the Court to further the underlying objectives (see Order 1A rule 3) which provides :-

“Duty of the parties and their legal representatives (O.1A, r.3)

3. The parties to any proceedings and their legal representatives shall assist the Court to further the underlying objectives of these rules.”

18.  In the case of Top One International (China) Property Group Company Limited and others –v- Top One Group Limited and others (HCA No.1244 of 2009), where Hon Fok J (as he then was) when considering whether reliefs be granted from sanction imposed under Unless Order, had said at paragraph 42 of the Judgment:

“42……..Although striking out is a strong sanction, it is in keeping with the spirit of CJR and the duty on parties to assist the court to further the underlying objectives of the RHC.”

19.  Further, at paragraph 62 of the Judgment, His Lordship said :

“62. Taking all the matters I have referred to into account, I have ultimately come to the conclusion that I should not grant relief from the sanction imposed by the Unless Order in the present case. I recognise that the striking out of the Amended Defence deprives the 1^st and 3^rd defendants of the opportunity of having their day in court and it is therefore a draconian sanction. But in the light of my findings, it would be right to say that the 1^st and 3^rd defendants have brought this          on their own heads.”

20.  In the case of Lin Jian Chun –v- Lin Xiu Mei and others, DCCJ No.2491 of 2008, where Deputy Judge C. Lee (as he then was) at paragraph 16 of his Judgment said:

“16……….I do not think that the present case has the special features of Take Harvest Ltd. Further, Take Harvest Ltd was decided before the UK’s Civil Procedure Reform (CPR) and Hong Kong’s Civil Justice Reform (CJR). The said case should be viewed together with the current fundamentals of the CJR. I do not think the CJR’s primary aim on ‘just resolution of disputes’, the underlying objectives of ‘cost-effectiveness’, ‘expeditious disposal’, ‘procedural economy’, ‘fairness’, ‘distribution of Court’s resources’ would accommodate ‘failure to plead a substantive point’, ‘taking the other by surprise’, ‘repeated change of front’, ‘resuscitation of an abandoned point with hindsight’ and ‘have a second bite of the cherry after trial’.

21.  This Lin Jian Chun case went on appeal under HCMP No.157 of 2012 where Hon Kwan JA at paragraph 15 of the Judgment had said :

“15……..I agree with the judge in para 16 that the present case does not have special features to justify the exercise of discretion to permit a belated amendment after trial, having regard to the objectives of the Civil Justice Reform. It is unlikely that the appeal court would exercise its discretion to allow such an amendment to the pleadings to          be made in the present climate.”

22.  In the later case of Joyful Sparkle Company Limited –v- Ng Pik Chu trading as Shan Yau Co, (DCCJ No.1881 of 2008), Deputy Judge C. Lee (as he then was) had also said at paragraph 28 :

“28. I bear in mind that the court should always recognise that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties : see O.1A, r.2(2). On the other hand, the interests of the administration of justice require that a case is dealt with expeditiously as is reasonably practicable. I recognize that refusal to set aside the Judgment deprives the Plaintiff of the extra opportunity of calling witness or having their day in court. But in light of my findings, the Plaintiff or Mr. Yee’s couple can be said to be the author of its misfortune, if any. In essence, I am of the view that “deliberate absence”, “no real prospect of success” and “public interest” are the          material factors tipping against setting aside the Judgment.”

23.  Although all the above cited cases relate to other aspects or stages in the course of litigation, I believe the central theme lies with how the Court should exercise its powers and discretion within the precepts of the CJR of which also apply to proceedings in the Family Court.    

24.  The 2^nd Consent Summons drafted by YTT was filed on 9 January 2014 (which is about 4 ½ months before the 1^st Appointment hearing on 21 May 2014).  The Husband’s previous lawyers (“TK”) saw fit to endorse on it as drafted by YTT and, even after the husband’s change of lawyers from “TK” to Messrs Withers (a firm known to have extensive experience in matrimonial practice) and up to the 1^st Appointment hearing, Messrs. Withers presumably without instructions to take any steps to remove or re-phrase those conflicting clauses and provisions in the 2^nd Consent Summons which was signed and filed 4 ½ months ago and which is plain and obvious for disposal at the 1^st Appointment hearing.  There was not even a simple summons issued or a short letter written to this Court seeking to ‘withhold’ consideration of the 2^nd Consent Summons at the 1^st Appointment hearing.  Upon enquiry by this Court, the reason given by Miss Shum acting for the husband was that she expected the 1^st Appointment hearing on 21 May 2014 was a direction hearing only.  Such explanation is plainly unacceptable. There is no rule prohibiting a party to issue a Summons to returnable on the same day and at the same time of any forthcoming hearing or, if the court’s diary permits, even at a date earlier than the next hearing forthcoming.  In fact, this does happen day to day in the Family Court.      

25.  As Counsel Mr. Chan conceded at paragraph 12 of his skeleton submissions, the problem which had happened was not the subject matter of any appellate decisions.  However, with those clearly set principles and objectives under Order 1A rule 1 coupled with those post CJR case law, I do not agree that further guidance from the higher courts is needed since it involves the exercise of discretion within different factual matrix. Ground No.5 has no reasonable prospect of success on appeal.

26.  I wish to add that legal practitioners are entrusted by their clients upon their expertise and are expected by the Court at all times to possess the highest degree of knowledge and competence.  They should not place reliance upon the Court to check, vet and correct their drafting of documents which contain clauses and provisions blatantly contrary to the legal position.  This should never be the Court’s role or function. Having said, there is no room for any viable alternative for the Court to ‘re-word’ those conflicting provisions as a periodical payment under section 4(1)(b) of the MPPO as Counsel Mr. Chan had so stated in paragraph 22 of his skeleton submissions and in his oral submissions.  

27.  As regards Ground No.1, in the absence of any summons from the husband either to request adjournment of the 1^st Appointment hearing or to seek to “withhold” consideration of the 2^nd Consent Summons, and also in the absence of consent from the other party for the court so to do, there is no legitimate reason or legal basis that this Court should on its own initiative (my emphasis) put a ‘halt’ to the 1^st Appointment proceedings or to adjourn it.  To do so is in flagrant disregard of the aims and objectives of the CJR at the expense of parties’ or their lawyers’ own fault, if I may use such a word without any disrespect to any party or their lawyers.  Therefore, Ground No.1 has no reasonable prospect of success on appeal.

28.  As regards Ground No.2, I see no reason why the emphasis, or ‘complaint’, should now be shifted over to the Court for it to have considered the 2^nd Consent Summons whilst the parties’ legal representatives took no responsibility in good time to either ensure the purported consent summons filed before the Court for approval was flawless and free of defects; or, as in the present case where there are flaws and defects, to take whatever appropriate steps to remedy the situation.  There is a lapse of 4 ½ months.  On the date of pronouncement of the decree nisi (i.e. 13 January 2014), the 2^nd Consent Summons had already been filed and was considered by this Court.  This Court did not approve it or make any financial orders upon the 2^nd Consent Summons (which also seek withdrawal of the 1^st Consent Summons) but decided to adjourn the question of ancillary reliefs to 21 May 2014.  A letter dated 20 January 2014 was also sent to both parties’ lawyers in response to the 2^nd Consent Summons stating “Hearing stands”. 

29.  In my view, there are 2 occasions that the parties should have noticed that there might be problems with the 2^nd Consent Summons; for otherwise, it would have been approved by the Court at the same time when the decree nisi was pronounced. The first occasion was the time when the draft order of the decree nisi hearing was amended with the returnable date of 21 May 2014 arranged by the court for disposal of ancillary reliefs.  The second occasion was the time when the letter of this Court stating “Hearing stands” was sent.    

30.  I heard no submissions from Counsel Mr. Chan as to how this Court, by refusing to endorse those clauses and provisions which contravene the law, could be said to be revising or amending the purported consent summons whilst the Court, in proper discharge of its judicial functions and duties, has no role to play on exploring the parties’ intention and agreement behind leading up to the signed consent summons before it.  It is also not the Court’s role to try to find out, by reading into those conflicting clauses or provisions, why the clauses are there and what the parties actually wanted to achieve.  This is in all respect the role of the parties’ legal team.  Thus, the husband’s contention that this Court ought not to have approved the purported consent summons because it was flawed or defective (Ground No.2), or the purported consent summons did not properly and accurately embody and/or reflect parties’ agreement (Ground No.3), or the terms or the Order as granted had fundamentally and substantially departed from what was signed (Ground No.4) are all devoid of merits.  There is no reasonable prospect of success on all these 3 grounds.

31.  As regards Ground No.5, the submission was that the Court simply had no jurisdiction to make the Order without conducting the normal and usual final ancillary relief trial when the Order as made was not what the parties had agreed.  In furthering this ground, Counsel Mr. Chan submitted that the Order granted is not a Consent Order as it was not what the parties had originally intended and thus, it might well be just a “Ruling” of the Court.  Reference was also made to those words appeared in the peremptory part of the perfected sealed copy Order, namely,  “THE JUDGE ORDERED THAT” without the key words ‘BY CONSENT” in there.   

32.  I can only agree with Counsel Mr. Chan that the Order granted might probably not be called a “Consent” Order.  I am, however, not convinced that the Court should, in the absence of any application for adjournment or otherwise and upon the court noticing that there were conflicting clauses and provisions, there and then refrain from considering the entire consent summons before it and to direct a trial on ancillary reliefs.  A dividing line must be drawn between the Court’s role of discharging its judicial functions and the parties’ or their lawyers’ duty of care and competence in preparing joint applications for approval by the Court.   In the case of an order being sought on the strength of a consent summons drafted by lawyers which was not approved in its entirety by the Court, the parties themselves would be, using those words of Deputy Judge C. Lee in the Joyful Sparkle case supra, the author of their misfortune.  Thus, Ground No.5 has no reasonable prospect of success on appeal.

33.  As regards Ground No.6, it referred to the aims and objectives of the HK$6 million and HK$12 million not being fully reflected upon by the purported consent summons and ought to have been clarified and so expressed.  In my view, this falls back to the basic question of drafting of the purported consent summons by lawyers rather than a justifiable ground for appeal (or complaint) of the Order granted.  Ground No.6 has no reasonable prospect of success on appeal.

34.  Ground Nos.7, 9 and 10 all referred to the fundamental basis and premise of parties’ agreement (under the terms of the purported consent summons) as to the HK$6 million is for the benefit of the children (Ground No.7), as to the possible relief given to the husband not having to pay the HK$12 million on the possible death or re-marriage of the Wife (Ground No.9) and as to the delayed commencement of payment of the HK$12 million which in itself also subject to the possible contingencies of death or re-marriage of the Wife (Ground No.10), having all failed in light of the terms of the Order as granted.  Counsel Mr. Chan is unable to produce any cases or authorities that the Court, in proper discharge of its role and judicial functions when making orders, has a parallel duty so to speak to go further to ensure the fundamental basis and premises of parties’ agreement would not be undermined or affected by those terms of Order which the Court is minded to make.  I heard no submissions either from Counsel Mr. Chan that what this Court did on 21 May 2014 was not a proper discharge of its role and judicial functions.  As said, any such contention would give rise to a shift of emphasis if not a shift of roles between the Court and parties’ legal representatives.  Ground Nos.7, 9 and 10 have no reasonable prospect of success on appeal.

35.  Ground No.8 referred to the HK$12 million by 120 equal monthly instalments only to start after full payment of the HK$6 million by 60 equal monthly instalments and ceases upon the Wife’s death or re-marriage, whichever is the earlier.  The submission made was that there are implicit hints of such arrangement (see paragraph 35 of Counsel Mr. Chan’s skeleton submissions).  I find this argument unconvincing.  I see no reason why the Court need to venture to ‘guess and find’ whether there are any implicit hints within the terms of a consent summons drafted and handled by competent lawyers on both sides.  Ground No.8 has no reasonable prospect of success on appeal.

36.  Ground No.11 referred to the failure to give credit and/or to take into account of the HK$100,000 per month which the husband had been paying since January 2014 and will continue to do so and which would be taken into account of and/or set off against the lump sum of HK$6 million for the children.  As rightly conceded by Counsel Mr. Chan, the terms of the purported consent summons contain no such reference of account or set off at all.  In such a case, how would this Court be in any position to find out such an arrangement or even came to know that payments had already started and would be on going ?  This ground of appeal has no reasonable prospect of success.

37.  Ground No.12 is an argument upon procedural technicality rather than a meritorious ground.  To adjourn and to direct further evidence from the parties is, in my decision, only appropriate if the Court was satisfied that there was a basis or justifiable to do so.  A classic example may be that the Court finds it unable to proceed with the hearing because one of the parties was absent for medical reasons (with proof) or the Court finds it unable to discharge its role and judicial functions such as a recusal application had succeeded.   For those reasons set out above and without repeating each of them, I do not accept that this Court should have brought the hearing on 21 May 2014 to an end by adjourning it.  Ground No.12 has no reasonable prospect of success on appeal.

The Matrimonial Proceedings and Property Ordinance, Cap.192

38.  The statutory power to make lump sum financial orders are embodied in Section 4 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”) which provides :-

“(1) On granting a decree of divorce, a decree of nullity of marriage or a decree if judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of section 25(1), make any one or more of the following orders, that is to say –

(a) ……..

(b) …….

(c) an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified (my emphasis).

(2) Without prejudice to the generality of subsection (1)(c), an order under this section that a party to a marriage shall pay a lump sum to the other party –

(a) …..

(b) may provide for the payment of that sum by instalments of such amount as may be specified (my emphasis) in the order and may require the payment of the instalments to be secured to the satisfaction of the court.”

39.  Section 25 of the MPPO, Cap.192 is under the title  “Commencement of proceedings for financial provision orders, etc”  which provides :-

“(1) Where a petition or joint application for divorce of a petition for nullity of marriage or judicial separation has been presented or made, then, subject to subsection (2), proceedings under section 3, 4, 5, 6 or 6A may be begun, subject to and in accordance with rules of court, at any time after the presentation of the petition or the making of the application; but -

(a) …..

(b) without prejudice to the power to give a direction under section 26, no such order made on or after granting a decree nisi of divorce or of nullity of marriage, and no settlement made in pursuance of such an order, shall take effect unless the decree has been made absolute (my emphasis).”

40.  Further, the statutory powers to vary or discharge orders for financial provision are contained in Section 11 of the MPPO which provides :-

“(1) Where the court has made an order to which this section applies,

then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

(2) This section applies to the following orders, that is to say –

(a) any order under section 3;

(b) any order made by virtue of section 4(1)(a) or (b) or 4(2)(b);

(c) any order made by virtue of section 5(2)(a) or (b) or 5(4);

(d) any order made by virtue of section 6(1)(b), (c), (d) or (e) on or after granting a decree of judicial separation;

(e) any order made by virtue of section 6A; and

(f) any order made by virtue of section 8(5), 8(6)(a), (b), (d) or (e) or 8(7)(b).”

The Order dated 21 May 2014 (“the Order”)

41.  It is also Counsel Mr. Chan’s submission that the husband, having to face the terms of the Order, inter alia, the 2 lump sum payments against him, could not have it varied or discharged under section 11 of the MPPO.  The Court would consider such an application only if there is a material change of circumstances (see HCTT –v- TYYC [2008] 5 HKC 86), which the husband does not have and also would not have. 

42.  On the other hand, the 2 lump sum payments as ordered, was beyond the husband’s ability to pay because it makes the husband having to pay monthly instalments of HK$200,000 instead of HK$100,000, the latter of which was originally agreed by the parties under the purported consent summons but not the former.  

43.  There is also the further contention that this Court had no jurisdiction to make the Order as worded (see paragraph 20 of Counsel Mr. Chan’s skeleton submissions).

44.  The powers of variation and discharge under section 11(1) applies to those financial orders made as set out under section 11(2)(a) to (e).  Lump sum orders are not one of those orders made as set out under section 11(2)(a) to (e).  Lump sum orders are granted under section 4(1)(c) of the MPPO.  In the case of CH –v- MEH, FCMC No.1969 of 2007 (Application for variation of lump sum order by instalments), where His Honour Judge Bruno Chan, after considering the line of English cases and statutory provisions, in his 51 pages Judgment at paragraphs 51 and 52 had said :-

“51. From these authorities it is clear to me that the English courts do indeed have the power to vary a lump sum order by instalments under s.31(2)(d) MCA not only as to the timing of the instalments or the manners in which they are paid, but also to discharge a particular instalment or the remaining instalments which must have the effect of varying the quantum of the original lump sum, and if there is power to discharge the remaining instalments, I see no reason why the quantum of a particular instalment or of the remaining instalments cannot be varied as well, as the Husband has proposed in the present case, in appropriate circumstances.

52. Given the identical wording of our s.11(2)(b), I agree with Ms Irving that our courts similarly have the same power to vary a lump sum order by instalments, as I believe that it must be the legislative intention to provide a remedy to the payer as to the remaining instalments in exceptional circumstances so as to relieve hardship having regard to all the circumstances of the case, rather than to allow the parties to revisit the terms of the original lump sum order or the entire settlement thereby opening the floodgates to the ancillary relief order, and that in the exercise of such power, s.11(7) provides that the court in having regard to all the circumstances of the case it shall include any change in any of the matters to which the court was required to have regard when making the order to which the application relates.”

45.  This case went on appeal under CACV 92 of 2011 (reported in [2012] 1 HKLRD 751) and was unanimously upheld by the Court of Appeal.  

46.  Having said, this poses the first question that was the Order of this Court dated 21 May 2014 a lump sum order made by virtue of section 4(1)(c) of the MPPO ?  The answer turns upon statutory interpretation of the words “as may be so specified” in that subsection.  Applying a literal interpretation, I find the words “as may be so specified” referred to the number and the amount of the lump sum ordered.  Further, the words “lump sum or sums” are used in the subsection.  Thus, the Order as worded provides for 2 lump sums of HK$6 million and HK$12 million was made within the jurisdictional limits of section 4(1)(c) of MPPO.

47.  Now turns to section 4(2)(b) of the MPPO where it provides that in an order where lump sum is payable to the other party, the court may provide for the payment of that lump sum by instalments of such amount as may be specified.  Again, applying a literal interpretation, I find the words “as may be specified” contained in this subsection 4(2)(b) referred to stating the amount of each of the instalments because it was preceded by the words “such amount”.  Thus, the Order as worded provides for 60 equal monthly instalments of HK$100,000 and 120 equal monthly instalments of HK$100,000 respectively for the HK$6 million and HK$12 million was also made within the jurisdictional limits of section 4(2)(b) of MPPO.

48.  The Order provides for, inter alia, 2 lump sums of HK$6 million by 60 equal instalments of HK$100,000; HK$12 million by 120 equal instalments of HK$100,000.  The question which remain is that when exactly are each of these instalments under the 2 lump sums are to be payable ?  Would the Order as worded put a complete end to the matter so that the parties could no longer be able either to resolve amongst themselves as to the time of payment of instalments or to apply to the court for such directions ?

49.  On this topic, Counsel Mr. Chan referred to Section 25(1)(b) of the MPPO and submitted that the 60 and 120 instalments would start to become payable together at the time of the decree absolute.  This means the husband has to pay HK$200,000 (HK$100,000 + HK$100,000) on the date of the decree absolute (my emphasis).  With respect, I do not agree.  Section 25(1)(b), as I read it, provides for the earliest time, not at a particular moment in time, when lump sum orders are to take effect.  This is unambiguous because of the words “no such order …….shall take effect unless the decree has been made absolute (my emphasis)”.  This is quite different from “upon decree absolute”.  This explain why from time to time parties would need to specify in a consent summons that either upon decree absolute or within a certain period of time after the date of decree nis being made absolute that lump sum or transfer of property orders are to take effect.  The Order as worded neither state the 60 and 120 equal monthly instalments are to be payable upon decree absolute nor to start to become payable within any time frame after the decree nisi was made absolute.

50.  There is also a fallacy in Counsel Mr. Chan’s argument.  The phrases “First Lump Sum” and “Second Lump Sum”, the difference in the amount of the 2 Lump Sums (that is HK$6 million and HK$12 million), the number of instalments (that is, 60 and 120) all appear in the terms of the Order and when read together are indicative that there may be different time for the instalment payments to start.  Reason being that had the first monthly instalments of HK$100,000 under the 2 Lump Sums been payable together as Counsel Mr. Chan submitted, the end result would be that 50% of the Second Lump Sum of HK$12 million (that is HK$6 million) to be paid at the same time as the First Lump Sum of HK$6 million, it follows that the total amount of the first batch of Lump Sum will become HK$12 million (that is HK$6 million + HK$6 million) leaving behind the second batch of payment is what is left over, namely, HK$6 million (that is HK$12 million – HK$6 million). Then, if Counsel Mr. Chan’s submission is correct that the both monthly instalments become payable together, why would the HK$6 million be expressed as the First Lump Sum and HK$12 million expressed as Second Lump Sum (as now worded in the Order) but not vice versa ? 

Is it a variation under Section 11 of the MPPO ?

51.  It is trite law that a consent order can be varied by the subsequent consent of the parties or by the court.  However, as submitted by Counsel Mr. Chan, the Order as worded is no longer a “consent order” (see paragraph 31 above).  In such a case, there is no room for the husband to seek variation both for the reasons that lump sum orders are not variable and also that there is no material change of circumstances of the husband.

52.  The court has no jurisdiction to vary a lump sum order was made clear in Masefield –v- Alexander (Lump Sum : Extension of Time) [1995] 1 FLR 100, CA. However, it was also held that in some circumstances the court can make a further order to the original lump sum order, albeit quite limited in its scope and mostly confined to extending the time fixed in the order for payment of the lump sum, unless such extension would strike at the heart of the lump sum order, or in other words, unless time is held to be of the essence of the order in which case the extension would amount to a prohibited variation.  

53.  The facts of the Masefield case are simple.  In that case the husband was ordered in 1993 to pay the wife a lump sum of £100,000 on or before 1 January 1994 to enable her to buy a new property, in default of which the matrimonial home was to be sold and the proceeds divided in certain proportions.  On 31 December 1993, the husband applied for an extension of time.  On 12 January 1994, the husband’s application was dismissed.  On 3 February 1994, the husband tendered to the wife £100,000 plus interest.  The Court of Appeal allowed the husband’s appeal and held that the extension sought did not strike at the heart of the lump sum order, nor did it amount to a prohibited variation.

54.  Having said, the Order as worded does not even specify the time for payment of any of the instalments (c.f. Masefield case) but nevertheless the 2 lump sums are within the parties’ agreement that they would be payable by instalments.  It is my decision that any application by the parties, or by the husband payer, for directions or clarifications as to the time of payment does not amount to any variation under section 11 of the MPPO.   Any such application is not a prohibited variation since it does not strike at the heart of the amount of the 2 lump sums of HK$6 million and HK$12 million that the parties had originally agreed, both of which are to be payable by instalments.     

55.  There is thus no question of the husband having to show any material change of circumstances which Counsel Mr. Chan submitted the husband does not have and would not have.

The Section 18 declaration

56.  Counsel Mr. Chan in his skeleton submissions at paragraph 38 referred to the purported consent summons did contain a clause seeking the section 18 declaration for the fact that the parties had agreed HK$6 million would be for the children.   At paragraph 39 of his skeleton submissions, Counsel Mr. Chan further submitted this Court is open to disagree with the children having been provided for and if so, the Court ought to have refused to approve the purported consent summons rather than ‘deleting’ the section 18 declaration. 

57.  As said in paragraph 6 above, there was no section 18 granted at the hearing on 21 May 2014.  This would have to be rectified since leave had been granted under this Decision.

58.  From time to time, practitioners tended to include a paragraph in their consent summons dealing with ancillary reliefs that there are no children of the family or, if there are children but their ancillary reliefs having been provided for or, it is impracticable for parties to appear in court to make any arrangements or, in exceptional circumstances that there ought to be granted the declaration, a prayer for such section 18 declaration.    

59.  Counsel Mr. Chan fairly conceded that it is always open for the court not to be satisfied with the parties’ financial arrangement to have been sufficiently provided for the children in question even though the parties themselves thought otherwise.   

60.  To approve the financial orders sought by the parties jointly under a consent summons is the court’s role and judicial functions.  Whether or not and at what stage to make the section 18 declaration is entirely within the court’s decision after taking into account the overall circumstances of each particular case before the court. Approval of financial orders and granting the section 18 declaration does not necessarily go hand in hand.

61.  In the present case, it was noted that there is only an acknowledgement and undertaking of the Wife to apply and use her own fund including but not limited to the lump sum payments (in plural sense, my emphasis) to be made by the husband (see Recital (C)(2) of the Order) to support and maintain herself and the children of the family.  This is the only provision which relates to the financial support of the children.  However, the reference to ‘her own fund including but not limited to the lump sum payments’ has clearly negated any submission of the alleged clear-cut distinction between HK$6 million for the children and HK$12 million for the Wife.  This Court must be informed in the clearest terms what exactly are the financial arrangement over the children before it could be satisfied with the making of the section 18 declaration.  In my view, this could easily be dealt with by the parties providing further information to the Court.  Hence, this is not a question of the court, if I may use the word in Counsel Mr. Chan’s skeleton submissions, ‘deleting’ the prayer for the declaration.    

62.  This explain why it was said by this Court towards the end of the hearing and after the making of the Order that details of how the instalments of the lump sum payments are to be paid, nature of payments already made so on so forth need to be resolved by both parties’ lawyers outside court .

63.  The relevant parts of the transcripts are reproduced as follows :-

“……..我而家再翻閱整個情況, 咁因為喺第二版嘅 C (2) 嘅處, 就已經有一個 clause, 就係話 respondent 方面就會承諾就自己處理番自己嘅生活費用, 亦係包括埋兩名家庭子女直至一個 maximumterm , 咁亦係喺前提上面, 亦有兩個 lump sum 畀佐㗎喇, 但係即 係 agreed by the parties, 但係點樣畀法, 咁我而家暫時 -- 因為未有decree absolute, 我就唔可以頒任何嘅instalment order住. 係, 咁至         於留待點樣畀法或者畀咗嗰啲錢、係咩嘢 nature等等, 咁我留待律 師喺庭外處理喇….”

         (see R to V at page 19 of the transcripts).   

Any other reasons for granting leave to appeal ?

64.  Apart from the reasons set out above to the husband’s grounds of appeal, I also find that there being no reason in the interests of justice that leave to appeal should be granted.

Conclusion

65.  For the above reasons, I dismiss the Husband’s Summons dated 18 June 2014 seeking leave to appeal. 

66.  Taking into account of the fact that the present situation arose from the terms of the 2^nd Consent Summons (drafted by YTT for the Wife) where both parties had relied upon their respective lawyers, I believe neither party should bear the other’s costs is a fair and reasonable result.

67.  Therefore, I make no Order as to costs.  This is a costs order nisi which will become absolute if neither party applies for variation within 14 days from the date of this Decision.

68.  I also wish to thank Counsels for their assistance.